Surviving Healthcare Reform: Understanding Grandfathered Plan Options
I Already Have Insurance. Do I Have to Change?
Those who have had their coverage since prior to March 23, 2010 (the date President Obama signed the Affordable Care Act (ACA) into effect) without having made changes, are considered to have a "grandfathered" plan. In most states they have the option of keeping their existing coverage. Everyone else will have to choose a plan that is compliant with the new law.
Most people with a Grandfathered plan will want to keep it, at least for a while. That is because the new plans are going to be much more expensive for most people. This is because all plans starting in 2014 are Guaranteed Issue, and must pay for pre-existing health conditions as soon as someone signs up. This will increase costs, resulting in higher premiums. Also contributing to higher premiums are regulations that prohibit low-cost catastrophic coverage, and others which require young people’s premiums be higher to subsidize older insured persons.
When Should Someone with a Grandfathered Plan Consider Changing?
If you have a grandfathered policy that does not cover a pre-existing condition, you may want to consider a new plan. That’s because the new plans (effective January 1, 2014) won’t have any exclusions or waivers placed on any policies. If you have a pre-existing condition that was excluded from your old plan, you will not be denied coverage for this condition under the new one. If your current policy excludes a major medical condition, it might make sense to sign up for a new plan.
Others who might consider dropping a grandfathered plan are those who qualify for a subsidy. Subsidies are available as an immediate tax credit to those who earn less than 400 percent of the federal poverty level (FPL), but these subsidies are not available on grandfathered plans. For an individual, 400 percent of FPL for 2017 equates to $47,550 (or about $97,200 for a family of four). Only minimal subsidies will be available unless you are earning less than 200 percent of the FPL. Visit our Premium Subsidies page to learn more about how subsidies work.
Are There Benefits to Switching from a Grandfathered Plan?
New plans include behavioral health and preventive screenings, including checkups, vaccines, and various screening tests, at no out-of-pocket cost to you. Catching health problems early can sometimes make all the difference in the world, so if you do get a new ACA-compliant health insurance plan, make sure to take advantage of this covered preventive care.
There’s A Lot to Be Said For Experience.
The decision between the old and new health care plans could be one of the most important of your lifetime. Don’t leave it to an inexperienced navigator or newly trained insurance professional to help you maximize your savings and reduce unnecessary costs. HSA for America is ready to share our expertise to simplify and maximize your healthcare options, at no cost to you. Learn more at Surviving Healthcare Reform.