Feds to issue rules on 'grandfathered' health plans and new law

The Wall Street Journal reports that draft regulations "being developed by the Obama administration say more than half of employer health care plans may lose their grandfathered status and be required to comply with the health overhaul bill approved March 23. The guidelines are likely to touch off fresh disputes between President Obama and opponents of the health care bill. Mr. Obama promised as part of his health overhaul that Americans who liked their insurance coverage could keep it. The regulations govern so-called grandfathered status, which allowed employers to keep offering a plan even if it doesn't meet all the bill's requirements. ...  New plans would have to comply with all the bill's requirements; grandfathered plans could avoid elements such as limits on cost sharing" (Johnson, 6/12).

The new regulations would "limit the changes that employers can make if they want to be exempt from certain provisions of the health care law passed by Congress in March," The New York Times adds. "Many employers want the exemption because it allows them to keep their existing health plans intact with a minimum of changes. More than 170 million Americans have employer-sponsored insurance." Plans will lose their grandfathered status if they increase employee's costs "by more than the rate of medical inflation plus 15 percentage points" or cut all benefits for a specific condition. The grandfather status means that plans do not have to fulfill requirements such as meeting "essential health benefits" to be mandated by the government. However, even grandfathered plans would have to meet other requirements, such as a prohibition against canceling policies when a person gets sick (Pear, 6/13).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.