what is the benefit of grandfathered or not grandfathered health insurance?

[frank]

I am on medicare and my wife is on a grandfathered plan with our insurance company. What is the difference or benefit of a grandfathered and not grandfathered. any ideas? might seem like a stupid question, but I really don't know.

 

[rbmrtn]

They are exempt from SOME of the new requirements but not all

Grandfathered Health Plans | HealthCare.gov

 

[Brett_Cameron]

They are exempt from SOME of the new requirements but not all

Grandfathered Health Plans | HealthCare.gov

Thanks!

 

[Mulligan]

A big possible benefit is an underwritten grandfathered plan will probably be significantly cheaper than one that takes all comers, such as the coming exchanges. You would be in a group of also healthy underwritten people of same age group. Less claims equals less premium costs. One of the current "unknowns" is how many and for how long "grandfathered" plans survive. They will not be allowed to accept new people into the "group", so eventually they will probably die off on their own eventually, in the individual market, anyways.

 

[CH]

I am on medicare and my wife is on a grandfathered plan with our insurance company. What is the difference or benefit of a grandfathered and not grandfathered. any ideas? might seem like a stupid question, but I really don't know.

This is a really good question.

Grandfathered health plans avoid 13 provisions of the Affordable Care Act:

- New Government Reports – Since Obamacare became law, employers are required to provide the State Insurance Commissioner and the Secretary of Health and Human Services specific information about enrollment, claims and payment policies for their health plans.

- Claims Review – The PPACA has expanded the internal claims review process, which would apply to any new plans that went into place after March 23, 2010.

- Annual Reports – Newer plans must provide the Secretary of Health and Human Services with an annual report that details how the plan will improve health outcomes.

- First Dollar Coverage – All plans must provide first-dollar coverage for any preventive care services. These include an annual check-up and blood test. For women, it also includes a mammogram after age 35 and an annual gynecological exam.

- Premium Rules – One provision of Obamacare, known as the "Fair Health Insurance Premiums," requires that insurance premiums can only vary by an individual's age at a maximum 3:1 ratio and for tobacco usage at a 1.5:1 ratio. Rates may also change based on geographic rating area and the type of coverage (family or individual.)

- Emergency Services — Effective on March 23, 2010, all new insurance policies will cover emergency services without prior authorization.

- Guaranteed Access — Perhaps one of the most groundbreaking changes to healthcare access, the "Guaranteed Availability of Coverage" provision obligates insurance providers to accept every individual or employer who applies for insurance.

- Any Willing Provider – This provision stipulates that plans may not discriminate against any willing provider of medical services if they operate within the scope of their practice.

- Health Status — this provision prohibits plans from discriminating against certain participants based on the status of their health.

- Essential Benefits — Effective with the enactment of Obamacare, new plans must provide "essential benefits" to all participants, as outlined and mandated by the law.

- Clinical Trials — The PPACA also mandates that individuals who participate in approved clinical trials will also receive coverage from their insurance plan.

- Preventive Care — In addition to ensuring that all health insurance plans include preventative care, Obamacare mandates that all preventive health services are covered 100% by the insurer without any cost sharing.

A grandfathered plan:

May not significantly cut or reduce benefits
May not raise co-insurance charges
May not significantly increase co-payment charges
May not significantly raise deductibles
May not significantly decrease the employer contribution
May not tighten the annual limit of what the insurer will pay
May not change insurance providers

 

[CH]

A big possible benefit is an underwritten grandfathered plan will probably be significantly cheaper than one that takes all comers, such as the coming exchanges. You would be in a group of also healthy underwritten people of same age group. Less claims equals less premium costs. One of the current "unknowns" is how many and for how long "grandfathered" plans survive. They will not be allowed to accept new people into the "group", so eventually they will probably die off on their own eventually, in the individual market, anyways.

This is largely incorrect information. If an employer has a grandfathered plan, they can continue to hire employees and insure them through their grandfathered plan. A company's employees typically include all age groups (below medicare age). When a company hires an employee, they have no idea what health problems family members may have and are prohibited by law from asking. I do agree grandfathered plans will eventually go away because the limitations for maintaining the status is so onerous.

 

[Mulligan]

This is largely incorrect information. If an employer has a grandfathered plan, they can continue to hire employees and insure them through their grandfathered plan. A company's employees typically include all age groups (below medicare age). When a company hires an employee, they have no idea what health problems family members may have and are prohibited by law from asking. I do agree grandfathered plans will eventually go away because the limitations for maintaining the status is so onerous.

CJ, I was referring to the individual market of grandfathered plans, not company ones. Sorry, if I didn't make that clear in my post.

 

[CH]

CJ, I was referring to the individual market of grandfathered plans, not company ones. Sorry, if I didn't make that clear in my post.

OK. You are probably right there. I did not even know there are grandfathered individual plans. I am familiar with grandfathered employer plans because my employer has one.

 

[Mulligan]

OK. You are probably right there. I did not even know there are grandfathered individual plans. I am familiar with grandfathered employer plans because my employer has one.

Individual plans if purchased before early 2010, and it they meet guidelines, they are considered grandfathered. Insurance companies have been silent on their intentions to continue the eligible ones, or close them next year. I am nervous because I have one and want it to continue.

 

[freetodream]

I am presently on what would become a "grandfatherd" plan but it seems expensive to me and would cost about $15,000+ per year for a family of 2 when I retire. If I quit the plan there is no going back to it. The question I am struggling with is: Should I pay the high premiums and stay on the plan after I retire?

 

[frank]

"One provision of Obamacare, known as the "Fair Health Insurance Premiums," requires that insurance premiums can only vary by an individual's age at a maximum 3:1 ratio and for tobacco usage at a 1.5:1 ratio. Rates may also change based on geographic rating area and the type of coverage (family or individual.)" What does this mean maximum ratio 3 to 1 and for tobacco usage at 1.5 to 1? do you have a link to this? thanks and I also was talking about individual plans.

 

[Mulligan]

I am presently on what would become a "grandfatherd" plan but it seems expensive to me and would cost about $15,000+ per year for a family of 2 when I retire. If I quit the plan there is no going back to it. The question I am struggling with is: Should I pay the high premiums and stay on the plan after I retire?

There really are a lot of variables in determining what is best value for you. If you are in position to receive financial subsidies based on income, the insurance offered in the coming exchanges could be considerably cheaper than what you are paying. Your age and how much you access medical care could also make exchange insurance a compelling value. When the actual prices come out, you can make your decision based on all relevant information at that time. You will have a significant time window to make this determination.
When I have written "grandfathered plans" will be cheaper, I shouldn't have written it that way, as there are just to many variables and individual differences that come into play. A "grandfathered plan" is definitely cheaper for me, but that is based solely on the fact, that I am not 50, a male, do not access medical care, and unable to receive income subsidies. YMMV!