Has your grandfathered health insurance plan truly withstood the test of time? Or have you just kept it around out of convenience? As 2016 Obamacare open enrollment approaches, it may be a good time to reevaluate your grandfathered health benefits.
No, you don’t have to get rid of the health plan you’ve relied upon for several years—well, you don’t have to unless your health insurance company cancels your plan. However, you may want to explore your options and see if something else is a better fit.
While grandfathered health insurance plans are considered minimum essential coverage that fulfills the Affordable Care Act’s individual shared responsibility provision, they don’t necessarily offer the same consumer benefits and protections as the major medical health insurance plans sold today.
What qualifies as a grandfathered health plan?
If your health insurance plan was purchased on or before March 23, 2010, the day the Affordable Care Act was signed into law, it is considered a grandfathered health plan.
Your health insurance plan materials are required by law to state that your plan is grandfathered.1 If you have questions about whether or not your health insurance coverage is grandfathered, contact your health insurance company.
Why would I choose a new health plan?
Grandfathered health plans are not required to adhere to all of Obamacare’s consumer protections. Whether or not that is important to you is entirely up to you.
However, it is helpful to at least be aware of requirements placed on the individual health insurance plans offered today and understand how they differ from those placed on grandfathered health plans.
As with all Obamacare health plans, grandfathered plans must:
- End lifetime coverage limits
- End arbitrary cancellations of health coverage
- Cover adult children up to age 26
- Provide a Summary of Benefits and Coverage
- Follow the rate review and 80/20 rules, which protect consumers from rate increases considered to be “unreasonable” and limit how much of your premium dollars insurers can spend on administrative, overhead and marketing costs.
Unlike Obamacare health plans, grandfathered health plans are not required to:
- Include preventive care at no cost sharing to you
- Guarantee your right to appeal a coverage decision
- Protect your choice of doctors and access to emergency care
- Be held accountable through rate review for excessive premium increases
- End yearly limits on coverage
- Cover you if you have a preexisting condition
Of course, some grandfathered plans may do some of these things. You must read your plan materials or contact your insurance company for specific benefits and protections.
Do grandfathered health plans qualify for subsidies?
It can also be helpful to remember that grandfathered plans don’t qualify for Obamacare subsidies—income-based financial assistance comes in the form of premium tax credits that lower health insurance premiums and cost-sharing reductions that lessen out-of-pocket healthcare expenses.
Subsidies are only available to consumers who purchase health insurance through state-based and federally facilitated exchanges. Because grandfathered health insurance plans are existing plans that you renew, they cannot be purchased through state-based and federally facilitated exchanges and thereby do not qualify for Obamacare subsidies.
Should I ditch my grandfathered plan and buy different health insurance?
It is possible you like your grandfathered health plan and that it makes perfect sense for you. It is also possible you could be missing out on coverage that better meets your needs.
If your grandfathered health plan will remain available next year, you can renew it. But before you do, make sure your decision is an informed one.
Start by considering the following:
- Does your existing health plan still meet your healthcare needs?
- Do you avoid getting preventive care due to cost?
- Would changing plans mean losing benefits you use?
- Does your grandfathered health plan still make sense financially?
- Will your premium, deductible, copay or coinsurance amounts increase next year?
- Would you be eligible for income-based subsidies such as premium tax credits and cost-sharing reductions if you purchased health insurance from a state-based or federally facilitated exchange?
- Does switching coverage mean losing access to your preferred healthcare providers and hospitals?
Of course, shopping around and comparing health plans is the best way to know if your grandfathered coverage is still the right fit. When open enrollment begins Nov. 1, 2015, search plan options available through your state’s Obamacare exchange as well as in the private marketplace.
Work with a health insurance agent or broker to learn more about what health insurance plans are available to you and your family. These professionals can help guide you in selecting coverage that makes sense for your situation.
Remember to shop for supplemental benefits
Supplemental coverage such as dental, telemedicine, critical illness, and gap plans that help with deductibles and out-of-pocket expenses can help reduce healthcare costs throughout the year.
During open enrollment, as you put together your personal health benefits for 2016, be sure to look at the big picture when it comes to cost and benefits. Browse supplemental plan options and get quotes at www.healthedeals.com. If you have questions or need assistance, call 888-839-7679 to talk with an IHC representative.