Monday, September 20, 2010

Buh-bye, Gramps!

Looks like the promise that "if you like your current plan, you can keep it" is officially dead.

How did I arrive at this morbid conclusion?

By taking this test (and Hats Off to BCBS of Georgia for this interactive tool).

We've covered the "grandfathering" issue before, but it's important to understand that, come this Thursday, (9/23/10), that promise officially goes under the bus. You see, that's the next ObamaCare© "expiration date," and it's by far the most crucial one. After Thursday, the "grandfathering" provisions of ObamaCare© go online, and the countdown to the end of your current plan begins.

How can I be so sure?

It's quite simple, really: when you cut through all the other provisions, there are two which will will make it impossible to keep your current plan. These affect both individual and group plans, and we'll look at both.

The first thing to understand is that being grandfathered means being exempt from certain ObamaCare© provisions, such as Community Rating (coming in '014) and unlimited preventive care (coming this Thursday). The former will increase premiums dramatically, the latter somewhat less. Some employers think that they can insulate themselves from these changes, but one provision in particular makes that impossible: to remain grandfathered, an employer can't increase employee's share of the premiums by more than 5% of the 2010 levels. Not just in 2011, but ever. This means that (to maintain grandfathered status) an employer could never increase the percentage of employee's contributions by more than 5%, while his own premiums begin their inexorable climb upward.

Think you're exempt because you have an individual medical plan? Wrong. As you know, premiums increase because the cost of health care increases; in the past, you could insulate yourself by switching carriers every couple of years. No more: if you switch carriers, you lose grandfathered status. Lose that, and your premiums will go even higher as your plan will now have to include a host of "benefits" you may or may not want or need (and those are just the ones we currently know about - it seems like each day brings revelation of another gotcha as we "learn what's in it").

The bottom line is that you will not be able to keep the plan you have. And if you're in a group, don't think for a minute that your employer isn't seriously considering dropping the group plan altogether. Think that's scare-mongering? Fine, but keep this in mind: businesses exist to make money. The cost of health insurance is already high, and heading higher. Employers aren't (yet) required to offer health insurance, so it's a very easy (and cost-effective) thing to jettison.

Kind of changes one's hopes, doesn't it?
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