If you like your health insurance plan, keep it

While many Americans are worried that they’ll be forced to give up their

current insurance plans because of the Affordable Health Care plan enacted by the Obama Administration, the U.S. Departments of Health and Human Services and Labor and Treasury have issued a new regulation that makes good on President Obama’s promise that Americans who like their health plan can keep it.

Most of the 133 million Americans with employer-sponsored health insurance through large employers will maintain the coverage they have today. Additionally, large employerbased plans already offer most of the comprehensive benefits and consumer protections that the Affordable Care Act will provide to all Americans this year – such as preventing rescission of coverage.

The roughly 42 million people insured through small businesses will likely transition from their current plan to one with the new Affordable Care Act protections over the next few years. Small plans tend to make substantial changes to cost sharing, employer contributions and health insurance issuers more frequently than large plans. To help small businesses afford employee coverage, the Affordable Care Act includes a tax credit for up to 35% of their premium contributions.

The 17 million people who are covered in the individual health insurance market, where switching of plans and substantial changes in covera- ge are common, will receive the new protections of the Affordable Care Act sooner rather than later. Roughly 40 to 60 per cent of people in individual market policies normally change plans within a year. In the short run, individuals whose plan changes and are no longer grandfathered will gain access to free preventive services, protections against restricted annual limits, and patient protections such as improved access to emergency rooms.

The new regulation protects the ability of individuals and businesses to keep their current plan while providing important consumer protections that give Americans – rather than their insurance companies – control over their health care. The regulation also provides stability and flexibility to insurers and businesses that offer health insurance coverage as the nation transitions to a more competitive marketplace in 2014 when businesses and consumers will have more affordable choices through Exchanges.

A “health care exchange” is a marketplace organized with partial or full governmental oversight, designed to facilitate the purchase of health insurance and to help insurers comply with consumer protections, compete in costefficient ways and to allow the expansion of insurance coverage to more people. The Exchange, planned to open in 2014, is one of the main reasons the plan is drawing accusations of being “socialist” in nature.

These Exchanges will offer individuals and workers in small businesses with a much greater choice of plans at more affordable rates – the same choice as members of Congress. In fact, the Congressional Budget Office (CBO) has estimated that, on an apples-to-apples basis, in 2016, premiums will be 14- 20 percent lower than they would be under current law, due to competition, lower insurance overhead and increased pooling and purchasing power.

“The Affordable Care Act gives American families more control over their health care by providing greater benefits, cost savings and protections,” said Secretary of Health and Human Services Kathleen Sebelius. “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.”

While the Affordable Care Act requires all health plans to provide important new benefits to consumers, under the law, plans that existed on March 23, 2010 are exempt from some new requirements. A healthcare plan is considered “grandfathered” if it existed before March 23, 2010, and grandfather status makes those plans exempt from certain new requirements. Plans will lose their grandfather status if they choose to significantly cut benefits or increase out-of-pocket spending for consumers – and consumers in plans that make such changes will gain new consumer protections.

“The rule we are announcing today will allow employers to make routine and modest adjustments to copayments, deductibles and employer contributions to their employees’ premiums without forfeiting grandfather status. This flexibility will encourage employers to continue offering health coverage to their employees and help to ensure coverage for all Americans,” said Secretary of Labor Hilda Solis.

All health plans – whether or not they are grandfathered plans – must provide certain benefits to their customers for plan years starting on or after September 23, 2010, including:

No lifetime limits on coverage for all plans;

No rescissions of coverage when people get sick and have previously made an unintentional mistake on their application; and

Extension of parents’ coverage to young adults under 26 years old;

For the vast majority of Americans who get their health insurance through employers, additional benefits will be offered, irrespective of whether their plan is grandfathered, including:

No coverage exclusions for children with pre-existing conditions; and

No “restricted” annual limits (e.g., annual dollar-amount limits on coverage below standards to be set in future regulations).

A fact sheet about the regulation can be found at: http://www.healthreform. gov/newsroom/keeping_the_ health_plan_you_have.html

You can view the regulation at: http://www.federalregister.gov/OFRUpload/ OFRData/2010-14488_PI.pdf