TUESDAY, MAY 21, 2013
When the Patient Protection and Affordable Care Act, aka Obamacare, starts rolling out in October, it will overhaul how Americans get healthcare coverage. Yet many workers will feel little immediate impact.
That's because almost half the 160 million Americans who received health coverage through their jobs in 2012 were enrolled in what's known as a "grandfathered" insurance plan, according to a Kaiser Family Foundation report.
These plans won't have to conform to many of the new regulations mandated by health reform. They won't have to eliminate annual caps on coverage or pay for preventive services with no out-of-pocket costs. Grandfathered plans are also exempt from a requirement that insurers cover at least 60 percent of expected medical costs.
Many of the some 15 million non-elderly people who buy policies on their own - or 6 percent of the total - will also fall under this exemption. The Congressional Budget Office estimates about 12 million individuals will continue to buy insurance outside of government health exchanges set up under Obamacare.
But just because you can slip in under the grandfather exemption doesn't mean you should. You may find it advantageous to move into one of the new plans.
After all, the Obamacare plans are largely designed to protect consumers - limiting what workers have to pay out of pocket and what insurers can refuse to cover. All new individual policies will have to cover more services, including medication, maternity and mental healthcare.
Any policy in place on March 23, 2010, the day health reform was enacted, falls under the grandfather exemption. As the Obama administration put it, if you like your plan, your doctor or both, you can keep them.
The best way to know whether your coverage falls into this category - if you get your coverage at work - is to ask your human resources department. If you buy your coverage privately, your insurer should send you a letter, or you can call and ask.
Last year some 60 percent of employers, large and small, offered at least one grandfathered plan during open enrollment, according to the Kaiser survey. New employees can also join a grandfathered plan so long as the company has maintained consecutive enrollment in it.
For a privately sold plan to be grandfathered it had to have maintained steady co-pay, deductible and coverage rates until now, and members need to have been enrolled before the legislation passed in 2010. That's relatively rare, given government figures that 40 percent to 66 percent of people with individual market policies change plans within a year.
For old plans as well as new ones, premiums are likely to rise next year - though the old plans still could be considerably more affordable than the newer ones.
That could make it difficult to decide whether to jump to the new or stick with the old grandfathered plan for as long as you can.
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