If you like your plan, you can keep it. That was the Presidential pitch heard round the world, but now, three and half years later, we’re hearing reports of millions of policy cancellations and seeing the Administration issuing apologies and grasping for a remedy. So, where’s the discrepancy?
Here’s what happened
The Affordable Care Act (ACA) provided an outline for the minimum set of health care services (e.g. maternity care, hospitalizations, prescription drugs, etc.) that any health plan must cover beginning in 2014. Together, these services are known as the essential health benefits (EHB). Beginning next year, all health plans must cover the EHB or their enrollees are subject to tax penalties (i.e. the so-called individual mandate in full force).
That is, except for grandfathered plans. The ACA provided an exception to many of the law’s standards for plans that were in place on March 23, 2010 (the date the ACA was signed into law). If you had an insurance plan on that day and have kept that exact same plan with no changes in benefits, co-pays, or deductibles, you can keep the plan into 2014 and not be subject to a penalty. However, there was nothing in the law compelling health insurers to continue offering their existing plans.
How policy cancellations affect you
So what does this mean? It’s a classic political parsing. Prior to March 23, 2010, the President’s pitch wasn’t untrue . . . so long as your health insurer wanted to continue offering you the same plan year after year. Of course, adding that disclaimer doesn’t have quite the same ring to it, does it?
But are the policy cancellations really an unintended consequence of the ACA? The EHB were put in place in recognition that many individual policies don’t cover the things people need them to cover and are often designed to ward away the sickest (read: costliest) individuals. With this in mind, cancellations and the eventual extinction of bare-bones policies that don’t meet the requirements and goals of the law isn’t exactly shocking.
The rub: With Healthcare.gov off to a slow start, those with cancelled policies may have a hard (and error-riddled) time figuring out where to turn.