HR3200: You Will Lose Your Current Insurance

HR3200 - Reading The Bill: You Will Lose Your Current Insurance

I'm really getting sick of supporters of ObamaCare admonishing those who oppose it to read the bill. So, I'm starting a series in which I do just that, framing my opposition to the bill by referencing the actual wording of the proposed legislation.

Up first: Obama's claim that "if you like your current plan, you can keep it."

This claim is a bald-faced lie, and one that I will demonstrate using the wording of the bill itself. Whatever your private insurance coverage is today, whether or not you are satisfied with it, you will be forced to move to another plan by 2018.

First, some background. Page 14 defines "Y1" through "Y5" as years 2013 and following. So, anything in the bill that takes place in Y1 takes place in 2013, and Y5 in 2017.

Now, let's get into the heart of the matter. Start with this statement from Page 19, lines 1-5:

IN GENERAL.—Individual health insurance coverage that is not grandfathered health insurance coverage under subsection (a) may only be offered on or after the first day of Y1 as an Exchange-participating health benefits plan.

We can establish thus far that, as of January 1, 2013, all health insurance plans must be either a) an "Exchange-participating" benefits plan, or b) a grandfathered plan.

An "Exchange-participating" benefits plan is, essentially, any plan that is "qualified" under HR 3200, according to qualification rules that will be determined and implemented by the government.

So, what is a "grandfathered" plan? From the rhetoric coming from Obama, one would assume that all currently existing plans would be "grandfathered". Not so.

According to Page 16, lines 3-26, Section 102, PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE:

GRANDFATHERED HEALTH INSURANCE COVERAGE DEFINED.—Subject to the succeeding provisions of this section, for purposes of establishing acceptable coverage under this division, the term ‘‘grandfathered health insurance coverage’’ means individual health insurance coverage that is offered and in force and effect before the first day of Y1 if the following conditions are met:

(1) LIMITATION ON NEW ENROLLMENT.—

(A) IN GENERAL.—Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day of Y1.

(B) DEPENDENT COVERAGE PERMITTED.—Subparagraph (A) shall not affect the subsequent enrollment of a dependent of an individual who is covered as of such first day.

(2) LIMITATION ON CHANGES IN TERMS OR CONDITIONS.—Subject to paragraph (3) and except as required by law, the issuer does not change any of its terms or conditions, including benefits and cost-sharing, from those in effect as of the day before the first day of Y1.

See that? Not all pre-existing plans will be considered as "grandfathered"; but rather only those that meet two very important conditions. To be considered "grandfathered", a plan must:

1. Exist prior to January 1, 2013,
2. Not enroll any new members on or after January 1, 2013 (except for adding dependents to existing plans, and
3. Not change any of its terms or conditions on or after January 1, 2013

Now, how tenable are those requirements? Not very.

Are you insured through your employer? Do you think that your company will hire any new employees on or after January 1, 2013? Do you think that your employer will want to add those new employees to the company insurance plan? Do you think that your company might want to negotiate new or better coverage, or changes to deductibles, or make any other routine changes to your plan?

Of course. And if so, your insurance plan will no longer be grandfathered. Once it is no longer grandfathered, it will be subject to government control and subject to the requirements and qualifications for "Exchange-participating" plans.

However, let's make the extreme assumption that such a plan will exist, and will remain viable. You're in the clear, right? You'll be able to keep that coverage for as long as your grandfathered plan doesn't change and doesn't enroll any new members, right?

Wrong.

According to page 17, lines 11-19, Sec. 102(b), GRACE PERIOD FOR CURRENT EMPLOYMENT
9 BASED HEALTH PLANS:

IN GENERAL.—The Commissioner shall establish a grace period whereby, for plan years beginning after the end of the 5-year period beginning with Y1, an employment-based health plan in operation as of the day before the first day of Y1 must meet the same requirements as apply to a qualified health benefits plan under section 101, including the essential benefit package requirement under section 121.

Now, what is "an employment-based health plan in operation as of the day before the first day of Y1"? You guessed it: an otherwise "grandfathered" plan.

This clause clearly indicates that "grandfathered" plans are only truly grandfathered for the first five years (2013-2017). After this "grace period", all pre-existing employment-based health plans will be subject to government control and subject to the requirements and qualifications for "Exchange-participating" plans.

Thus, we have indisputably established that, according to the wording of HR 3200, you will be forced into a different health coverage plan from the one you have today, by 2018.

For reference and context, below is TITLE I—PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLAN Subtitle A—General Standards, pages 14-19 of HR 3200:

Page 14 •HR 3200

14 TITLE I—PROTECTIONS AND
15 STANDARDS FOR QUALIFIED
16 HEALTH BENEFITS PLANS
17 Subtitle A—General Standards
18 SEC. 101. REQUIREMENTS REFORMING HEALTH INSUR
19 ANCE MARKETPLACE.
20 (a) PURPOSE.—The purpose of this title is to estab
21 lish standards to ensure that new health insurance cov
22 erage and employment-based health plans that are offered
23 meet standards guaranteeing access to affordable cov
24 erage, essential benefits, and other consumer protections.

Page 15 •HR 3200

1 (b) REQUIREMENTS FOR QUALIFIED HEALTH BENE
2 FITS PLANS.—On or after the first day of Y1, a health
3 benefits plan shall not be a qualified health benefits plan
4 under this division unless the plan meets the applicable
5 requirements of the following subtitles for the type of plan
6 and plan year involved:
7 (1) Subtitle B (relating to affordable coverage).
8 (2) Subtitle C (relating to essential benefits).
9 (3) Subtitle D (relating to consumer protec
10 tion).
11 (c) TERMINOLOGY.—In this division:
12 (1) ENROLLMENT IN EMPLOYMENT-BASED
13 HEALTH PLANS.—An individual shall be treated as
14 being ‘‘enrolled’’ in an employment-based health
15 plan if the individual is a participant or beneficiary
16 (as such terms are defined in section 3(7) and 3(8),
17 respectively, of the Employee Retirement Income Se
18 curity Act of 1974) in such plan.
19 (2) INDIVIDUAL AND GROUP HEALTH INSUR
20 ANCE COVERAGE.—The terms ‘‘individual health in
21 surance coverage’’ and ‘‘group health insurance cov
22 erage’’ mean health insurance coverage offered in
23 the individual market or large or small group mar
24 ket, respectively, as defined in section 2791 of the
25 Public Health Service Act.

Page 16 •HR 3200

1 SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT
2 COVERAGE.
3 (a) GRANDFATHERED HEALTH INSURANCE COV
4 ERAGE DEFINED.—Subject to the succeeding provisions of
5 this section, for purposes of establishing acceptable cov
6 erage under this division, the term ‘‘grandfathered health
7 insurance coverage’’ means individual health insurance
8 coverage that is offered and in force and effect before the
9 first day of Y1 if the following conditions are met:
10 (1) LIMITATION ON NEW ENROLLMENT.—
11 (A) IN GENERAL.—Except as provided in
12 this paragraph, the individual health insurance
13 issuer offering such coverage does not enroll
14 any individual in such coverage if the first ef
15 fective date of coverage is on or after the first
16 day of Y1.
17 (B) DEPENDENT COVERAGE PER
18 MITTED.—Subparagraph (A) shall not affect
19 the subsequent enrollment of a dependent of an
20 individual who is covered as of such first day.
21 (2) LIMITATION ON CHANGES IN TERMS OR
22 CONDITIONS.—Subject to paragraph (3) and except
23 as required by law, the issuer does not change any
24 of its terms or conditions, including benefits and
25 cost-sharing, from those in effect as of the day be
26 fore the first day of Y1.

Page 17 •HR 3200

1 (3) RESTRICTIONS ON PREMIUM INCREASES.—
2 The issuer cannot vary the percentage increase in
3 the premium for a risk group of enrollees in specific
4 grandfathered health insurance coverage without
5 changing the premium for all enrollees in the same
6 risk group at the same rate, as specified by the
7 Commissioner.
8 (b) GRACE PERIOD FOR CURRENT EMPLOYMENT
9 BASED HEALTH PLANS.—
10 (1) GRACE PERIOD.—
11 (A) IN GENERAL.—The Commissioner
12 shall establish a grace period whereby, for plan
13 years beginning after the end of the 5-year pe
14 riod beginning with Y1, an employment-based
15 health plan in operation as of the day before
16 the first day of Y1 must meet the same require
17 ments as apply to a qualified health benefits
18 plan under section 101, including the essential
19 benefit package requirement under section 121.
20 (B) EXCEPTION FOR LIMITED BENEFITS
21 PLANS.—Subparagraph (A) shall not apply to
22 an employment-based health plan in which the
23 coverage consists only of one or more of the fol
24 lowing:

Page 18 •HR 3200

1 (i) Any coverage described in section
2 3001(a)(1)(B)(ii)(IV) of division B of the
3 American Recovery and Reinvestment Act
4 of 2009 (Public Law 111–5).
5 (ii) Excepted benefits (as defined in
6 section 733(c) of the Employee Retirement
7 Income Security Act of 1974), including
8 coverage under a specified disease or ill
9 ness policy described in paragraph (3)(A)
10 of such section.
11 (iii) Such other limited benefits as the
12 Commissioner may specify.
13 In no case shall an employment-based health
14 plan in which the coverage consists only of one
15 or more of the coverage or benefits described in
16 clauses (i) through (iii) be treated as acceptable
17 coverage under this division
18 (2) TRANSITIONAL TREATMENT AS ACCEPT
19 ABLE COVERAGE.—During the grace period specified
20 in paragraph (1)(A), an employment-based health
21 plan that is described in such paragraph shall be
22 treated as acceptable coverage under this division.
23 (c) LIMITATION ON INDIVIDUAL HEALTH INSURANCE
24 COVERAGE.—

Page 19•HR 3200

1 (1) IN GENERAL.—Individual health insurance
2 coverage that is not grandfathered health insurance
3 coverage under subsection (a) may only be offered
4 on or after the first day of Y1 as an Exchange-par
5 ticipating health benefits plan.
6 (2) SEPARATE, EXCEPTED COVERAGE PER
7 MITTED.—Excepted benefits (as defined in section
8 2791(c) of the Public Health Service Act) are not
9 included within the definition of health insurance
10 coverage. Nothing in paragraph (1) shall prevent the
11 offering, other than through the Health Insurance
12 Exchange, of excepted benefits so long as it is of
13 fered and priced separately from health insurance
14 coverage.