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Your health plan will be cancelled...eventually

Time is running out for individuals to hang on to old plans

Health reform hasn't changed everything about health insurance, but has reworked our system enough to where many people like you will experience change. 

If you have an individual plan purchased prior to October 1st, 2013, then there are changes coming your way that your insurance company will notify you about.

Health reform has changed the insurance landscape, and one of the changes is the introduction of standard benefits, known as "Essential Health Benefits" which means more coverage than your current plan offers. For example, your current plan probably doesn't have maternity coverage (you'd have to ask for this specifically when you signed up) and health reform mandates that all health plans cover maternity. Doesn't matter if you are a 55-year-old male or a 25-year-old female.

The ACA has made certain benefits mandatory, so most old plans will soon be obsolete. The question is when. Many insurance companies don't want the bad press of canceling health plans, so you might be able to keep your plan but price increases will ensure you won't want to.
Every insurance company in every state will handle transitioning their clients onto a new health plan differently, but here is an example of how BlueCross BlueShield of Tennessee is handling the new laws.

There are two categories of health plans that will be eventually obsolete.

  1. Health plans bought before March 23, 2010, known as grandfathered plans. 
  2. Health plans bought after March 23, 2010, but before October 1, 2013, which we'll refer to simply as noncompliant plans. 

Grandfathered plans

BlueCross BlueShield of Tennessee is notifying clients who purchased a health plan prior to March of 2010, that they have two options for 2014.

  1. Keep the same plan. 
    • Keeping the same plan will result in a 32.5% increase (or more, depending on your age band). 
    • If you want to keep your plan, you don't have to do anything, rather just expect a cost increase. 
    • Expect a letter from your insurance company detailing all the changes. 
    • Your current plan will not have Essential Health Benefits. 
   2.   Find a new plan that is compliant with ACA laws.
  • New plans offer:
    • Coverage for more benefits, like maternity, a yearly physical, mental health and substance abuse services. 
    • More financial protection. New plans limit how much you can pay towards your out-of-pocket maximum. 
    • Access to subsidies. Switching plans may qualify you for cost-savings on your premiums from the government. Please note that you have to purchase a plan on the marketplace in order to qualify for subsidies.

Non-compliant plans bought after March 23, 2010

If you purchased your health plan before health reform (October 1st, 2013) then it most likely isn't compliant with the new laws. You will eventually have to switch to a new plan with new benefits, but your insurance company may let you keep your current plan for another year before making you switch. You, also, have two options for 2014.

  1. Keep the same plan. 
      • BlueCross BlueShield of Tennessee estimates a 15% increase if you decide to keep your plan for another year. 
      • If you want to keep your plan, you don't have to do anything, rather just brace yourself for cost increase and a need to select a new plan eventually. 
      • Your current plan will not have Essential Health Benefits.
   2. Find a new plan that is compliant with ACA laws.  
  • New plans offer: 
  • Coverage for more benefits, like maternity, a yearly physical, mental health and substance abuse services. 
  • More financial protection. New plans limit how much you can pay towards your out-of-pocket maximum. 
  • Access to subsidies. Switching plans may qualify you for cost-savings on your premiums from the government. Please note that you have to purchase a plan on the marketplace in order to qualify for subsidies. 

If you enjoyed this post, you may also like Grandmothered health plans | Blue Cross news for small groups.  

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