“If you like your health-care plan, you’ll be able to keep your health-care plan, period,” President Obama said — but that’s not quite true:
The Affordable Care Act sets standards that private insurance companies must follow. Health plans must pay for at least 60 percent of their members’ medical costs on average. They also have to provide 10 areas of coverage, called essential health benefits, such as hospitalization, mental health treatment, and maternity care. Plans that don’t meet these standards generally can’t be sold after 2013, unless they’re grandfathered (more on that below). Insurers are ending these plans and pushing people to buy more comprehensive policies, some of which may also have higher premiums. For low- and middle-income people, the law provides subsidies to make health coverage more affordable.
The change mostly affects people who buy their health plans on their own, rather than those getting coverage through an employer. Most employer health plans already meet those standards. There were about 11 million people in the individual market in 2011, according to data from the Kaiser Family Foundation. Not all of their plans are being terminated, because some of them meet the law’s requirements. A study published last year in Health Affairs found that half of the people in this market had plans that pay for less than 60 percent of their medical costs, falling short of the law’s requirement. Even more plans may not have offered all 10 essential health benefits, but the study didn’t look at that.
Why would you mandate more coverage than most paying customers already had?