New health-care rules could add costs, and benefits, to some insurance plans

President Obama introduced his health-care plan at a joint session of Congress in September.
President Obama introduced his health-care plan at a joint session of Congress in September. (Richard A. Lipski/the Washington Post)
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By David S. Hilzenrath and N.C. Aizenman
Washington Post Staff Writer
Tuesday, June 15, 2010

If you like your health plan, you can keep it. That's what President Obama promised during the long months of debate over health-care reform.

On Monday, the administration issued new rules to fulfill that promise. But your plan might not be quite the same -- it could offer more benefits, and it could cost more.

The administration estimates that many plans will end up changing, prompting Republicans to accuse the president of breaking his word.

The tempest involves an issue known as "grandfathering." Consistent with Obama's promise, the legislation said health plans in existence when the law was enacted are exempt from some of its requirements. But the law left it to the administration to decide how much a health plan can change without forfeiting that exemption.

The rules issued Monday begin to answer the question.

For instance, health plans would lose their protected status if they significantly raise deductibles or other out-of-pocket charges patients pay when they seek medical care.

Some plans require members to pay a percentage -- 20 percent, for example -- of the hospital or doctor bill. If plans want to remain grandfathered, they can't raise the percentages.

For increases in deductibles, the trigger is medical inflation plus 15 percentage points.

Employers would lose grandfathered status if they switch insurance companies -- unless the plan is covered by a union contract or the employer pays claims out of its own funds and uses the insurer only to administer the plan.

It isn't clear how much the restrictions on co-payments and deductibles will save consumers, because health plans can still raise premiums. The rules issued Monday say plans would relinquish grandfathered status if they reduce the percentage of the premium they pay by more than five percentage points. The broader health-care law includes checks on unreasonable increases, which have not been defined.

The administration estimated that by 2013, health plans covering as few as 39 percent and as many as 69 percent of employees could lose protected status. For small employers, the total could be as high as 80 percent; for large ones, it could reach 64 percent.

Those plans would then have to offer benefits required of new plans, such as fully covering certain preventive services and guaranteeing access to OB-GYNs. Beginning in 2014, non-grandfathered plans covering individuals and small groups would also have to offer at least a minimum benefits package as defined by the government.

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