The Benefits of a Grandfathered Health Insurance Plan

This is a message from George Geldin regarding your Grandfathered Health Insurance Plan.
I’m sure you’ve probably heard a lot about the grandfathering and the non-grandfathering of plans.

First, let me explain what that is.

On March 23, 2010, President Obama signed into law the Health Care Reform. And, of course, it did many, many things. And one thing it did is it drew a line on the calendar that basically said that any plans that are in force as of March 23, 2010 are considered to be Grandfathered Plans. New plans after that date, for the most part, are considered Non-Grandfathered Plans.

What’s the difference?

The Grandfathered Plans, because they were in force before the Health Care Reform, do not have to abide by the Health Care Reform, whereas the Non-Grandfathered Plans do have to abide by the Health Care Reform. And all of the Non-Grandfathered Plans that are currently in force as of this date in October of 2013, they are either being terminated or they are being migrated into new Health Care Compliant Plans effective January 01, 2014. So, people who have Non-Grandfathered Plans, they have no choice, they have to leave their plan and move into a new plan effective the first of the year.

People who have Grandfathered Plans: you have a choice. You have the choice of keeping your plan or you have the choice of switching to any open plan effective January 01. 2014. So you have a choice.

What is the value of having Grandfathered Plan? Well, it doesn’t have to abide by the Health Care Reform so many, if not most, of the Grandfathered Plans do not cover preventative care at 100%. Some don’t cover preventative care at all, so that’s a downside. There are some downsides to the Grandfathered Plans where, because they don’t have to abide by the Health Care Reform they may not have as much or as rich coverage as the new plans. However, because they don’t have to abide by the Health Care Reform, going forward into the future, they may end up a better value because they may just be less expensive going forward. And all of the new plans, as you’re probably aware, are now Guarantee Issue. Anybody can apply to any plan, there are no health questions, so anybody, no matter what their health situation, can enroll on any open plan now and we anticipate that going forward will drive rates and maybe drive rates higher. We might not see it immediately, but going into the future that may be a reality in this new Health Care Reform environment, and being on a Grandfathered Plan, where no new people, for the most part, can be added onto Grandfathered Plans or enroll on Grandfathered Plans, you’re insulated on that. So there’s a lot of reasons to keep a Grandfathered Plan because of that potential value in the future. All this is theory. We don’t know for sure this is not exactly what is going to happen, but in my opinion, it makes sense that there’s going to be value in hanging on to a Grandfathered Plan, for most people.

Some people, people who may be eligible for a subsidy from the government to help pay for their health insurance they may find that it’s better to go on a new plan through the state’s marketplace, Covered California. This is the Health Insurance Exchange you’ve probably been hearing a lot about. This is where you apply for new health insurance and this is where you will be able to obtain subsidy from the government to help pay for your health insurance. If you felt that you were eligible for a subsidy from the government maybe it might be worthwhile to replace your grandfathered plan with a plan that you are getting subsidized by the government and basically only paying a portion out of your pocket for that. It’s a little complex question that’s not cut and dry for everybody. We’re here to help you with that.

In order to enroll in a new plan, you have to apply by December 15th for a January 01st effective date, whether it’s through the state’s exchange, Covered California, or if it’s through any outside health insurance source outside Covered California. Again, we can help you with obtaining the insurance through Covered California or outside of Covered California or just discussing keeping your Grandfathered Plan.

Please keep in touch. We don’t have all of the rates and plans yet because they have not been approved by the Department of Insurance as of the beginning of October 2013. We anticipate getting those rates and plans by the end of October, or beginning of November. We can share the different options for you and see what might work best for you.

Stay in touch. Be healthy and happy. My best advise is: don’t panic, you have time to make changes, and having a Grandfathered Plan is a good thing because it gives you options. Be well. I look forward to being in touch; thank you!

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

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