Probably not. No promise was repeated more often by Barack Obama than the pledge that, “If you like the plan you are in, you can keep it.” For the vast majority of people, however, this promise almost certainly will not be kept. Here’s why.
Your Employer May Be Forced to Switch to Another Plan
In general, if employers make very few changes to their current plan, that plan will be grandfathered. But most plans will be unable to qualify for grandfather status. A government memorandum makes the following predictions.
A more recent survey of employers by AonHewitt, a human resources consulting service, suggests that this prediction may have been too optimistic: 90 percent of employers expect to lose their grandfather status by 2014.
Your Employer May Drop Coverage Altogether
Most employers will be required to offer health insurance or pay a fine. But since the fine will be as little as one-seventh the cost of the insurance, many employers—especially small employers—may drop their coverage. This will force you and other employees to go to a health insurance exchange for your health insurance. To a modest degree, this has already happened in Massachusetts, with a similar health reform law, and the reaction is likely to be more pronounced in other states. Overall:
Loss of Medicare Advantage Coverage
As noted, about half of the enrollees in Medicare Advantage (MA) plans (7.5 million people) are likely to lose their coverage and will be forced to return to conventional Medicare—a figure consistent with independent analysis. That process has already started. In 2011, Cigna Corp., Harvard Pilgrim Healthcare, several BlueCross BlueShield plans, and others announced they would not renew Medicare Advantage plans for 700,000 beneficiaries, who must find new policies. If you are able to keep your MA plan, expect higher premiums and fewer benefits in the years ahead.
Loss of Postretirement Coverage
The health reform law removes an important employer tax subsidy. As a result, almost all retirees with employer coverage for prescription drugs (5.8 million out of 6.6 million) are expected to eventually lose it, according to the latest Medicare Trustees report. For example, 3M, with 23,000 US retirees, has announced that it will drop coverage.
Loss of Independent Drug Plans
Seniors who have independently purchased Medicare Part D drug plans are also at risk. In 2007 there were 1,875 plans, while in 2012 there will be only about 1,041 plans—834 fewer than five years earlier. The loss of plans will force seniors to choose a new plan, with possible changes in premiums and co-payments.
Loss of Limited Benefit Plans
More than 1 million Americans currently have a health insurance plan that features “limited benefits,” sometimes called “mini-med” plans. Medical benefits in these plans are capped anywhere from a few thousand dollars to $25,000 or even $50,000 or more annually. Premiums are affordable—a family policy can be as little as $1,000 per year. Many other employees are in health plans that limit annual and lifetime benefits as a way to constrain the cost of coverage. Regulations under the new health reform law, however, ban annual and lifetime limits on medical benefits. They phase out completely by 2014.
As a temporary measure to prevent the possibility of millions of Americans losing their health coverage, the US Department of Health and Human Services has granted 1,722 waivers to more than 4 million people with limited benefit health plans. The waivers will allow these employees to keep their coverage for at least one more year. Some of the organizations that received waivers were staunch supporters of the health reform bill. More than half of the people covered by these waivers are members of labor unions, including the Service Employees International Union, the Teamsters, and United Food and Commercial Workers.
For more about the consequences of the Affordable Care Act, please consult my recent Independent Institute book, Priceless: Curing the Healthcare Crisis.