Should I keep my grandfathered health insurance plan?

If I am grandfathered in my current insurance, would it pay to stay or look for new health insurance in 2014? My insurance company says to keep it in case the new health care policies cost more.

Like so much about health insurance, whether a grandfathered health insurance plan is a good deal depends on the particulars of the health plan and the state of your personal health. “Grandfathered” health insurance plans are those that were in existence before the Affordable Care Act was signed into law on March 23, 2013.

Assuming you have a true grandfathered plan, you can renew it as many times as you want, even after health reform’s major changes kick in next year. It will fulfill your obligation to have health insurance. Just be aware that the plan may lack some consumer-friendly features that the new health care law requires of non-grandfathered plans. For example, grandfathered plans don’t have to give you free preventive care or allow you to appeal denied claims to an independent external reviewer.

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You may also have a plan that, although not grandfathered because you bought it more recently, lacks some of the benefits that will be required of all individual plans come 2014. Until then, insurance companies can sell plans that don’t cover essential health benefits such as mental health or maternity care. They can exclude coverage of your pre-existing conditions, in some cases indefinitely. If you have such a plan, you can keep it as is until whatever point in 2014 it expires, at which time the plan will have to add in all those required benefits.

“Companies are reaching out to currently insured people offering, in effect, to delay the new market reforms until late in 2014 by renewing their existing plan,” said Karen Pollitz, a health insurance expert with the Kaiser Family Foundation (no relation to the HMO).

My advice is to hang onto your plan for now, but when your state’s Marketplace opens on Oct. 1, check to see whether you might be able to get a better plan at a better price. It’s a risk-free move because you can get full benefit and pricing information without any obligation to actually buy a plan.

Bear in mind that the only way to get help paying your insurance premiums is to buy the plan on the Marketplace. These subsidies, in the form of a new kind of tax credit that you can use right away, are available to individuals earning less than about $46,000 a year and families of four earning less than about $94,000. If you stick with your existing plan, you can’t get this financial help.

I’d also be cautious about hanging onto a plan that doesn’t cover major categories of services. For instance, some low-priced individual plans sold today don’t cover prescription drugs, or, if they do, only generics. Even if you don’t need expensive medications today, there’s no guarantee about tomorrow. And if you pass up the opportunity to buy a comprehensive policy in the Marketplace during Open Enrollment, which runs from Oct. 1, 2013, through March 31, 2014, you won’t be able to switch to a new plan until next year’s open enrollment period.

—Nancy Metcalf

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