Keep Your Grandfathered Plan, If You Can Healthshare

Keep Your Grandfathered Plan, If You Can

Even though states are implementing a new way to get health insurance this fall, most people aren’t getting the news they need about this big change. It’s true that more of health care reform will be implemented next year, but where you get your health insurance may be changing less than you think.

Health insurance policies already have to comply with certain federal standards even before they are offered through state exchanges. The policies you can buy to cover you in 2014 will be available as of October 1 this year. Some insurance companies will be offering policies through state exchanges, but companies can also sell through the same markets they used before health care reform.

You May Not Need New Coverage Next Year

You may be able to keep a plan you bought before health care reform became law, too. That depends on whether your plan maintains a grandfathered status. Only plans that were effective prior to the date the healthcare reform law was signed – March 23, 2010 – are considered grandfathered. If you have a grandfathered plan, you are not required to have one of the new “metal” plans.

Since the older plans don’t have the same requirements as new plans, premiums on grandfathered plans may remain lower than the cost of new plans. Since millions of people with major health problems are expecting to sign up for coverage in 2014, the claims experience on the new plans is expected to be much higher, also leading to higher rates.

So for most people, it is looking like the best thing may be to keep the grandfathered plan that you currently have. People with plans that have exclusions on some pre-existing condition may find it worthwhile to consider changing plans. Also, some very old plans have had large rate increases, so in some cases one of the new plans might be a better value.

Whether you decide to keep an old plan or purchase a new one depends on which one covers the health care you need at the lowest cost. Before you make that choice, be sure to talk to us about what policies are available through all of the markets. Even if you prefer a plan that’s not offered by your state’s exchange, we can help you with the tax credit to make it more affordable. That’s based on your modified adjusted gross income and we’ll be happy to help you figure that out, too.

Jim McFadden

I have been in the health insurance business for over 12 years.I'm passionate about Health Savings Accounts and enjoy blogging about them.I am also a husband and father of 2 beautiful children.
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  • Jim corn

    So much confusion still out there. Articles like this help people understand what’s going on a little better.

  • Jewel

    I just found out yesterday that my NH Anthem/Blue Cross Lumenos HSA plan will not be available after June 2014. According to the letter I received from Anthem BlueCross BlueShield, “In order to both bring you a new plan that meets the requirements of the new health care reform laws, and lower the cost of health care delivery that impacts your premiums, we are no longer offering your current plan.”

    I spoke to a representative (after a very long hold) to learn that I have exactly 1 choice – I can purchase an “HSA-compatible” plan from the healthcare exchange for 38% more than my current plan. I’m not eligible to keep my current plan because I started it 3 months after Obamacare was signed into law. How is this legal? What is the future of HSA’s if mine is in this transient “compatible” state?

    In addition to this, the closest good hospital to me has been deemed out of network. How can the nation’s medical care endure such upheaval and confusion. How did we lose HSA’s – the plan that I think would pave the way to lower medical costs and greater personal choice and responsibility – for everyone?

    How did individuals lose so much power? I’ve never felt so disenfranchised in my life. What can we do to stop this national disaster before it becomes any more of a reality?

  • Fred Adams

    Jewel,

    I am very sorry to hear about the letter received. While there are no doubt some good aspects of health care reform, there are many people in a similar situation as yours, losing coverage they thought they could keep, and finding their new options to be more expensive, and with a much smaller network of providers. In some states, even people that have grand fathered plans are starting to receive letters informing them their coverage will be terminating on 12-31-13. Despite what we were promised, “if you like your plan, you can keep it” and “If you like your doctor, you can keep him too,” much of what was said during the attempt to pass this legislation is proving to be far from true.

    New Hampshire is one of very few states we do not sell, but I can tell you we are seeing clients nationwide experience rate increases up to 300%. I do agree with you completely that an HSA is the type of plan most people should have, especially anyone that is borderline for getting a subsidy, or a bigger subsidy, by lowering their taxable income. There is no other product on the market like an HSA, that can literally help lower your income taxes and increase your subsidy (or tax credits, as we at HSA for America prefer to call them). HSAs will not go away, even though the prices are, in most every instance, going up.

    I also share your concern regarding the smaller networks being offered with 2014 plans. In many cases, most policies being sold on the exchange are now HMOs, accepted by approximately 35% of providers, compared to PPOs that tend to be accepted at 85-90% of providers. In most states, you can still buy a PPO, often with the same exact coverage as the HMO, off the exchange. However, premiums for PPO plans are even higher, which is why insurance companies are offering more HMOs for on exchange sales.

    As for your last few questions of how did we lose so much power, and what can we do to stop the national disaster before it becomes more of a reality, the best answer I can offer you there is to stand up and let your voice be heard. Share this news with your friends, family, co-workers, anyone that will listen. Call your local media outlets (TV, radio, newspapers) and share your story, and outrage over your increased costs and lack of freedom of choice in which hospitals you use. Call your local politicians, Congressmen, send a letter to the White House. One voice alone may not seem capable of doing much, but if you will join HSA for America in singing the problems you are seeing as loud and far as possible, collectively, we can help take control of our once great nation back to the hands of the people, where it belongs.

    One somewhat positive piece of news I can give you, in regard to your local hospital, if you are in a medical, life threatening emergency, you are allowed to seek care at the closest medical facility available, even if it is out of network, and your coverage will be the same as if you were in network. However, once your situation stabilizes, and is no longer life threatening, you would be expected to move to an in network facility, or you would begin incurring out of network charges from the time your condition is concerned stable.

    I am sorry I could not provide better news, but all we can do is share the facts, and encourage you, and everyone else who reads these words, to join us in voicing your outrage to anyone that will listen. At this point, I do not think the law will be overturned, but it can certainly be improved upon, in many ways.

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