Rules unveiled last week that will govern the grandfathering of existing plans under health care reform legislation did not generate the outrage that opponents of reform hope create.
Under the interim rule with a request for comments unveiled Monday by the Departments of Health and Human Services and Labor, the administration projected that more than half the healthcare plans now in existence won’t be in compliance with the new rules by 2013.
Republicans used that projection to argue against reform, if most small or large business health care plans lose their grandfathered status by 2013, they asked, “can it really be said that the president has kept his promise to the American people that they can keep their coverage?”
Alec Valchon, a former Republican Senate staffer and now a healthcare consultant, argued that the President’s pledge was more “aspirational” than substantive.
He also argued that in general, “there is tremendous turnover in healthcare plans.”
Market reaction to leaks about what would be contained in the regulation as well as a release of the new rules signaled that the new rules “won’t change the insurance business in a material way,” he added.
He said compliance with the new rule would likely raise costs that employers and, probably, employees would have to pay, but the government didn’t act to reduce the number of covered lives that healthcare plans must provide for.
Officials of the National Association of Health Underwriters said they will ask for greater flexibility in the allowable copay band and a longer compliance transition in final regulations.
But Jessica Waldman, NAHU senior vice president of policy and public affairs, did not appear to believe the rules were Draconian and that agents’ groups could not live with them.
And Tom Currey, president of the National Association of Insurance and Financial Advisors, pointed to some encouraging aspects of reform.
Imposition of the grandfathering rules and all the new regulations that are expected as the law is put into practice will require agents to play “an even greater role assisting employers to evaluate whether it makes sense to make changes to their current health plans that could subject them to losing their grandfathered status,” Currey said. “Employers will need help determining the costs associated with putting a new plan in place or whether maintaining a ‘grandfathered’ plan would be a better decision for companies and their employees.”
Once that question is settled, the agent would then provide guidance on how to maintain the existing plan without losing the grandfathered status or assist the employer with the selecting of a new plan, Currey said.
Under the new rules, employers will lose the right to retain their current healthcare plans if they raised deductibles or copays by more than the rates of medical inflation plus 15%.