HHS Issues Interim Rules For Grandfathered Health Plans

Regulations released Monday will help determine which people who like their health plans will be able to keep them -- a frequent promise made by the Obama administration -- when the health overhaul takes full effect, The Washington Post reports. The regulation on "grandfathering," or exempting existing health plans from certain requirements, will mean an individual plan "could offer more benefits, and it could cost more." The law lets administration regulators determine what changes to plans employers could make without losing the exemption (Hilzenrath and Aizenman, 6/15).

Politico: "[C]ritics of the reform law said Monday that the administration's new rules clamp down too hard — and would effectively eliminate the old plans many Americans have and like." Sen. Charles Grassley, R-Iowa, said, "Change is coming for a lot of people, whether they want it or not." The regulation itself said 34 to 80 percent of employer-backed plans would lose their exemptions by 2013 (Haberkorn, 6/15).

USA Today: "The new regulations have been much anticipated. At issue: Which employers' plans get 'grandfathered,' meaning they get a pass on some of the new health law's rules on how much they can charge for preventive health care, and how much can employers tinker with insurance coverage before they lose their grandfathered status?" (Kiely, 6/14).

Modern Healthcare: The administration outlined "a number of ways health plans could lose their grandfathered status. Plans that substantially eliminate benefits to diagnose or treat a particular condition would lose the status, for instance. And changes to how much an enrollee pays could also lead to a plan being stripped of its grandfathered title" (DoBias, 6/14). 

Los Angeles Times: A Q&A lays out the basics. What can employers change without losing the special status? "Employers would be able to raise premiums and still retain grandfathered status. But the rules limit how much companies could raise co-pays, deductibles and other employee contributions. Employers also could not lower their contribution to their employees' premiums by more than 5 percentage points." They could make changes to benefits packages, but not cut benefits (Levey, 6/15).

The Associated Press: "The Obama administration had a message Monday for employers who want to keep federal bureaucrats from rewriting the rules for their company medical plans: Don't jack up costs for workers, and you won't have to worry about interference from the new health care law. 'What we don't want is a massive shift of costs to employees,' said Health and Human Services Secretary Kathleen Sebelius" (Alonso-Zaldivar, 6/14).

CQ HealthBeat on the political spin: "Aha! Republicans proclaim. Even the White House admits that health plans will face so many changes under the overhaul law that half or more of existing employer plans will lose their 'grandfather' status as of 2013. So much for President Obama's promise to the American people that you'll be able to keep the coverage you have, Republicans scoff."

"So what! Democrats retort. If plans do lose their grandfather status, the changes involved will help people, not hurt them, by giving them new consumer protections" (Reichard, 6/14).

Kaiser Health News has reaction from small business and consumer groups (Galewitz and Carey, 6/14).

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