Health Care Law Pushes More Americans Off Grandfathered Plans
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President Obama’s promise that “If you like your health care plan, you will be able to keep your health care plan” may be the most-famous line from the health care debate, edging out Rep. Nancy Pelosi’s infamous “We have to pass the bill so that you can find out what is in it.”
Health care experts knew when the Patient Protection and Affordable Care Act (PPACA) became law that the president’s promise would be broken, and new data out this week confirms that. According to the Kaiser Health Foundation’s annual Employer Health Benefits Survey, the percentage of Americans in grandfathered plans—those that are not subject to the full regulatory thrust of the PPACA—fell from 56% in 2011 to 48% in 2012.
In fact, even the administration’s regulators knew and acknowledged this when they issued rules to implement the law. On page 34553 (page 17 of this document) of the rules implementing the PPACA is a table estimating what percentage of employer plans would lose their grandfathered status. For 2012, regulators figured that between 36% and 66% would vanish--and they were right. In 2013, that trend should continue with anywhere between 35%-80% of employer health plans losing their grandfathered status.
And, if you haven’t heard, the Administration is touting $2.1 billion in savings because of the health care law, but it isn’t all that it appears to be. Yes, $1.1 billion is from the PPACA’s medical loss ratio rule—which requires insurance companies to spend at least 80% of premiums on health care benefits or refund the rest of the premium to customers. The other $1 billion comes from insurance premium rate review. However, prior to the enactment of the PPACA, states were already scrutinizing health insurance rate increases. The truth is that the Department of Health and Human Services report can’t distinguish the premium rate review savings due to the health care law from the savings that would’ve occurred anyway. Once again, the administration is taking more credit than it deserves.
Maybe they’re stretching the truth about the savings to paper over the fact that more Americans have discovered that the health care law can’t deliver what was promised.