June 25, 2019

Update: “Grandfathered” Health Insurance Plans in Effect as Part of National Healthcare Reform

Making good on President Obama’s campaign word to Americans that “if you like your plan, you can keep it,” the U.S. Department of Health and Human Services (HHS) announced on Monday that a regulation concerning “grandfathering” certain consumer protection provisions of the Patient Protection and Affordable Care Act (known as the “Affordable Care Act”) Cinto health insurance plans has gone into effect. In a press release issued Monday, HHS Secretary Kathleen Sebelius remarked:

The Affordable Care Act gives American families more control over their health care by providing greater benefits, cost savings and protections. Today, with the announcement of the new “grandfather” rule, we’re providing the market stability and flexibility to ensure that families and businesses can make the choices that work best for them.

Under the new regulation, insurance consumers covered by “grandfathered” plans (referring to plans in force as of March 23, 2010, the date the Affordable Care Act was signed into law) are protected in the following ways:

  • Benefits cannot be significantly cut or reduced;
  • Co-insurance charges (i.e., the insured’s portion of a large medical bill) and co-payments (i.e., the insured’s out-of-pocket cost for an office visit) will not be significantly raised;
  • Deductibles cannot be significantly increased;
  • Employers may not lower their contributions toward employee benefit plans by more than 5 percent; and
  • Insurers cannot “cap” the amount they will pay for covered services.

This Fact Sheet issued by the White House provides further details about the regulation and how it fits into President Obama’s overall agenda for healthcare reform. For more information about how individuals, businesses, and insurers will be affected by the new regulation, see this FAQ. The regulation will be enforced by the Departments of HHS, Labor, and Treasury.

We previously reported on healthcare reform filling the Medicare “gap” for early retirees who end their employment — and with it, their employer-sponsored insurance coverage — before they’re eligible for Medicare here, and will continue to help you stay abreast of reform as it happens.

(image source: healthreform.gov)

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