In mid-August, Agents received notification as of 1/1/18 that BlueCross BlueShield of NC (BCBSNC) would discontinue the Individual Grandfathered Health Insurance Plans.
What happened to “If you like your plan – You can keep it” promise?
The Affordable Care Act (ACA) language allowed for insured individuals as of the date (3/23/2010) of signing of the ACA into law to keep their existing plan, if their carrier chose to continue those plans. Thankfully, BCBSNC did choose to continue those plans until Grandfathered plans were no longer a viable option for either BCBSNC or their Grandfathered members.
Why are Individual Grandfathered plans no longer a viable option for BCBSNC or the Grandfathered Members? Within the ACA, language there is a death warrant for all Grandfathered plans by a slow but sure starvation. Here is a metaphor of the way the ACA Grandfathered language as written. You have a potted plant on your deck in a small planter. You like the plant and want to always keep and maintain that plant. However, to keep this plant, you are required to pinch off any new growth, shoots, or suckers that develop. You can only work with the existing plant material. By the way, you cannot add any new dirt, fertilizer, or plant food – much less re-pot the plant when it becomes root-bound. You can water it and keep it in the light, but light is limited to 6 or 8 hours per day maximum. The plant will survive for a while with the nutrients in soil of the small container and the plants built up reserves, but eventually, it will shrivel as it starves to death, no matter how much attention and care you give it.
In the same way, the Grandfathered Plans starved to death. Specifically, no plan benefit(s) changes within those plans are allowed, excepting adding a maternity rider, to adjust to changing needs – i.e. re-potting the plant in a different size container. The death nail being Grandfathered plan membership closed except to individuals joining by marriage, birth, adoption, or children aging off their parents program, hence putting a choke hold on the Grandfathered plans. This factor is like not feeding the plant. Without the new younger and healthier folks joining the Grandfathered pool to keep rates in check and offset claims of the current members getting older and sicker, Grandfathered plans turn upside down into a death spiral. We again are fortunate that BCBSNC did manage this Grandfathered pool to survive these past eight years with no new members allowed in this product. Just as the plant starved of nutrients, no matter how much attention and care BCBSNC or the Grandfathered members gave to these health plans, the ACA itself doomed Grandfathered plans. We commend BCBSNC for their efforts as many other carriers folded their Grandfathered books much earlier.
Congress has failed us again with the ACA. While technically they did not lie to us when they made the promise we could keep our present plan if we liked it, they effectively undermined and doomed to failure our Grandfathered plans by slow strangulation, forcing currently insured Grandfathered members into ACA plans or go uninsured and pay the penalty. Many of these Grandfathered members will see triple digit increases in their premiums when they migrate to the ACA plans. To make this point, a 29-year-old male currently has a 2,000 deductible Grandfathered HSA plan and is paying $151 per month this year. When he converts to the closest ACA plan, his deductible increases to $5,500 with a projected premium of $463 (current rate plus 14% average rate increase as filed by BCBSNC) per month. That is a 307% increase in premium. Another example is a 60-year-old couple currently with a 4,000 deductible Grandfathered HSA plan paying just under $650 per month. The closest ACA plan for them has a $1,500 increase in deductible plus a $4,000 increase in their Maximum Out of Pocket Cost. That new plan is only a mere $2,200 per month premium (again projected at 2017 rates plus the 14% average rate increase filed by BCBSNC). That calculates to an insignificant 338% increase. A premium of $2,200 per month is equal to a new Ford Mustang, Chev Equinox, or Honda CR-V LX every year you pay the health insurance premiums! Can you imagine?
What about Grandfathered members receiving premium subsidy when they enroll into an ACA plan? For those members with an annual household income of less than 400% of the federal poverty level that jointly file taxes – if married, and do not have access to any group coverage for themselves or a spouse may qualify for premium assistance. Logic dictates that most of the Grandfathered member that could take advantage of the “subsidized” premiums moved to an ACA plan already. We can only wait and see how many of the remaining Grandfathered members can actually qualify for subsidy once the annual enrollment concludes December 15, 2017 or the Special Enrollment Period for Grandfathered members expires at the end of February 2018.
Again, we must criticize our congressional leaders. They have failed us as well by not providing any relief to the adversities of the ACA and having a viable reform plan ready for those who truly need assistance. While the ACA has insured many that previously were uninsured, it has shifted the uninsured to the upper working middle class citizens – those that are paying the tax bill. By just the two examples presented above, the ACA is anything but affordable. Congress needs to act with all expediency and diligence to fix the problem they created in the ill drafted ACA bill.