Healthcare Reform School, Lesson #13 - Can I keep my Current Health Insurance Plan?

Welcome back to class.  I will welcome myself back as well, since I was on vacation with the family last week and missed my normal Thursday blog post.  This morning I will write about what happens to group and individual plans starting January of 2014.  Next week I will write about open enrollment for the health exchanges and the week after that I will write about SHOP which is the exchanges for small businesses/groups.

So many people are wondering what will happen to their current health insurance plan when the Affordable Care Act goes into effect on January 1, 2014.  The answer depends on a few factors.  I will take a few scenarios and answer that question very directly.  Do you remember back before 2010 when President Obama was trying to get this bill passed and made a promise that went something like this "If you like your current health insurance plan you will be able to keep it", well do you remember?  So plans that were in place way back then, can be kept the same forever.   However plans that have changed since then or have been purchased since then, can not be kept.  Read on.

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This paragraph is for people in the individual market, I will cover group plans next.  So the magic date on which the Patient Protection and Affordable Care Act (ACA) was passed is March 23, 2010.  Therefore a plan is "Grandfathered" if it is a Major Medical insurance plan that was purchased before that date and has not changed substantially.  That plan can be kept forever with one positive revision, there is no cap on medical benefits.  These are the "Grandfathered" plans for this bill and allow the president to keep his promise.  All plans that have been purchased since March 23, 2010 will need to meet the minimum requirements put in place under the ACA, and therefore are subject to change.  So how much will plans change and when will this change take affect?  This is where the answer gets complicated.  First I will cover how much they will change.  Essentially all plans that convert will have the "Essential Health Benefits" added into them (I also covered Essential Health Benefits in Lesson #4) and will ensure a maximum dollar exposure per person of $6,350 of medical expenses per year (double that for a family of two or more).  This exposure does not include premium costs.  How much will this affect a current plan depends on what that plan looks like now.  If it does not meet all of the essential health benefits or the financial exposure limits, then it will need to change.   The next part of the question is when will it change.  That answer depends on what company is providing the insurance and how that company is dealing with the ACA.  Some insurance companies are getting out of the individual market al together and dropping all of their clients. Some companies are converting plans on January 1, 2014.  Some companies are delaying the change to the plan renewal date in 2014 and some companies are delaying the conversion until December of 2014.  Some companies are even guaranteeing that their premiums will not increase all of the way through December of 2014.

So now on to the group plans.  The mandate for employers to provide qualified insurance was originally designed to affect only companies with more than 50 full time employees.  However, the requirements for group plans have been delayed until 2015.  So if a company currently provides a group plan, then it is that company's decision to keep that plan or drop it, AND it is their decision on what to offer in that group plan.  If the plan is dropped in 2014, then the individuals are still mandated to purchase qualified health insurance.  Most big corporations will keep their plans and many small companies will drop their plans because of the cost and because their employees will be able to get health insurance on the private market regardless of any pre-existing conditions.

This blog covers the question about "Can I keep my current health insurance plan?" on a relatively basic level.  There are many options available in the private market right now that will not be available in 2014.  I recommend putting yourself in a good position now to ride out the first bumpy years of the ACA.    

If this blog has done anything, it may have opened up more questions.  Learn everything I have written on the Patient Protection and Affordable Care Act by reading all my blogs lessons.  They are listed below.
Lesson #1 - Introduction
Lesson #2 - Basic Reason for creating the Patient Protection and Affordable Care Act
Lesson #3 - Public exchanges for Purchasing Insurance
Lesson #4 - Essential Health Benefits that will be added to all Health Insurance policies in 2014
Lesson #5 - Tax Credits to Help Pay for Health Insurance
Lesson #6 - Enforcement and Penalties in the Affordable Care Act
Lesson #7 - Preparing for the Affordable Care Act
Lesson #8 -  Options for Small Businesses
Lesson # 9 - Will my Insurance Premiums change in 2014?
Lesson #10 - What Will Happen to Small Groups in 2014?
Lesson # 11 - Why Should I Buy Insurance Before the Deadline?
Lesson #12 - What does the Delay in the Employer Mandate Really Mean?