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Second Opinion: What Is A Grandfathered Health Plan?

Second Opinion: What's A Grandfathered Health Plan?

Second Opinion is a weekly Q-and-A series that answers questions from San Diegans on the Affordable Care Act. Ask yours here.

Second Opinion: What Is A Grandfathered Health Plan?
A Ramona artist weighs whether to stick with her current health plan, which is grandfathered into the Affordable Care Act, or seek a new plan with more protections.


The Question: What can consumers expect if their health plan is grandfathered into the Affordable Care Act?

Regina Wilson lives in Ramona. She was able to stop working a while ago and spends her time painting and volunteering for the Oceanside Museum of Art and conservancy projects in San Diego's backcountry. Because she doesn't work, she purchases an individual Anthem Blue Cross health plan that's pretty expensive — $776 a month, up from around $660 last year.

Wilson was hoping for a break with the implementation of the Affordable Care Act, but it turns out the plan isn't going to change next year. Here's her question:

I have an individual plan and my insurance company said that it would be grandfathered in. How does that apply to me?

The Takeaway: Grandfathered plans offer fewer safeguards but continuity in care.

Lawmakers wanted to provide some stability for people who are already insured, either through their company or individually. So, they decided some plans that existed before March 23, 2010, wouldn't have to comply with all of the new regulations.

What they don't have to do:

  • Cover preventative care for free
  • Go through a review to raise premiums
  • Cover all of the "essential benefits" new plans have to include
  • Discontinue fines for getting emergency care outside of your network
  • Cap annual out-of-pocket spending (individual plans only)
  • Cover people with pre-existing conditions (individual plans only)

Rules they do have to follow:

  • Cover children until age 26
  • Remove limits on lifetime spending
  • Stop dropping coverage for arbitrary reasons
  • Spend 80 percent of premiums paid on health care, not administration costs
  • Guarantee the right to appeal decisions not to cover services

Want to find out whether you're in a grandfathered plan? This is going to sound familiar: talk to your insurance provider. There are a lot of them out there; about half of the people who get their benefits through work are in one, according to the Kaiser Family Foundation.

But the number of people in these plans is shrinking and the trend is expected to continue as new plans go on line in October. People who stick around may be in special courses of treatment and have relationships with their doctors they're just not willing to disrupt, said Sibyl Bogardus of Hub International Insurance Services Inc.. As the insurance pools for these plans get smaller and riskier, you can bet premium costs will go up.

The Orders: Shop around but remember, once you leave a grandfathered plan, you're out for good.

Wilson plans to take a look at the state-run insurance market, Covered California, in October to see if she can get a better deal. Whatever she decides, she shouldn't do it in haste. Bogardus said once you leave a grandfathered plan, you can't get back in.

Check out last week's Second Opinion: How does Obamacare Address End of Life Care?