What is a Grandfathered Plan Under ObamaCare?

What can you expect if your insurance plan is grandfathered in under ObamaCare?

Regina Wilson lives in Ramona. She was able to stop working a while ago and spends her time painting and volunteering for the Oceanside Museum of Art and conservancy projects in San Diego’s backcountry. Because she doesn’t work, she purchases an individual Anthem Blue Cross health plan that’s pretty expensive – $776 a month, up from around $660 last year.

Wilson was hoping for a break with the implementation of the ObamaCare, but it turns out the plan isn’t going to change next year. Here’s her question:

I have an individual plan and my insurance company said that it would be grandfathered in. How does that apply to me?

The Takeaway: Grandfathered plans offer fewer safeguards but continuity in care.

Lawmakers wanted to provide some stability for people who are already insured, either through their company or individually. So they decided some plans that existed before March 23, 2010 wouldn’t have to comply with all of the new regulations.

What they don’t have to do:

• Cover preventative care for free.
• Go through a review to raise premiums.
• Cover all of the “essential benefits” new plans have to include.
• Discontinue fines for getting emergency care outside of your network.
• Cap annual out-of-pocket spending (individual plans only).
• Cover people with pre-existing conditions (individual plans only).

Rules they do have to follow:

• Cover children until age 26.
• Remove limits on lifetime spending.
• Stop dropping coverage for arbitrary reasons.
• Spend 80 percent of premiums paid on health care, not administration costs.
• Guarantee the right to appeal decisions not to cover services.

Want to find out whether you’re in a grandfathered plan? This is going to sound familiar: talk to your insurance provider. There are a lot of them out there; about half of the people who get their benefits through work are in one, according to the Kaiser Family Foundation.

But the number of people in these plans is shrinking and the trend is expected to continue as new plans go on line in October. According to Sibyl Bogardus of Hub International Insurance Services Inc., the people who stick around may be in special courses of treatment and have relationships with their doctors they’re just not willing to disrupt. As the insurance pools for these plans get smaller and riskier, you can bet premium costs will go up.

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