Critical Condition

Will Any of Us Be Able to Keep Our Current Plans?

The pages of National Review and NRO are no strangers to debunkings of the president’s promise that “if you like your health-care plan, you will be able to keep your health-care plan. Period. No one will take it away, no matter what.” (If you really need proof, check out Deroy Murdock, Jim Geraghty, Stephen Spruiell, and Yuval Levin on the subject.) But, believe it or not, the truth may be even worse. Depending, once again, upon the regulatory divinations of HHS bureaucrats, it may turn out that no one with private insurance can keep his or her preexisting plan.

Here’s how it works: Obamacare, in theory, exempts “grandfathered” insurance policies from some, but not all, of the various regulatory mandates contained within its 2,300 pages. But, obviously, the law massively changes the interactions between government, insurers, hospitals and doctors, and patients. Insurers will need to adjust their policies to take into account changes in both the regulatory and the business environment.

So, if an insurer tweaks its policies in 2011 to conform to these changes, will the government define the new policy as an old one that has been tweaked, or a brand new one that can’t be grandfathered? In other words, what is the degree to which a “grandfathered” policy can change before it is redefined as a new policy and thereby subjected to an additional blizzard of new mandates? As Kaiser Health News describes it:

Many employer organizations, including the U.S. Chamber of Commerce and the National Federation of Independent Business, are pushing for a loose interpretation of “grandfathering” that allows employers to maintain flexibility in designing coverage. They want employers to be able to make changes in their health plans while retaining their grandfathered status. They fear that many of the law’s requirements will increase costs and premiums . . .

But consumer groups and organizations such as the American Cancer Society Cancer Action Network worry the “grandfathering” clauses will be a huge loophole that allows employers and insurers to avoid complying with the law’s increased consumer protections and benefits. “This is one of the most critical issues going forward in the regulation writing,” said Erin Reidy, senior policy analyst at the cancer group. “We are very concerned.”

Reidy said that grandfathered plans could go on into perpetuity because the law does not give a date when that status expires. She said the group is recommending that the administration “adopt a real narrow definition of grandfathering and any change to coverage should constitute a loss of grandfathering status.”

Unfortunately, at the moment, there isn’t a business in the country that has any idea what is going to happen. “The law is mostly vague on exactly what constitutes a grandfather plan,” notes the Kaiser report. “The administration, which is writing the regulations that implement the new law, is expected to issue its guidance soon on how it interprets the grandfathering clause.” Pray that there are no typos.

Avik RoyMr. Roy, the president of the Foundation for Research on Equal Opportunity, is a former policy adviser to Mitt Romney, Rick Perry, and Marco Rubio.

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