Stacie Ballard views the health insurance plan at her family’s small dairy and cheese operation in Gooding, Idaho, as a strong incentive for attracting and retaining workers.
Nonetheless, she recently learned her coverage fails to meet minimum requirements under the federal Affordable Care Act, and her best option may be to drop it rather than absorb inflated premiums, once new mandates under the law take effect in 2014.
Despite past assurances from President Obama that Americans can chose to keep their existing plans, insurance experts say Ballard’s situation has become commonplace in Idaho, and throughout the country. According to U.S. Sen. Mike Crapo, R-Idaho, more than 100,000 Idahoans have already received notice that their policies will be discontinued.
The ACA grandfathers in policies created prior to the law’s passage on March 23, 2010, unless they’ve undergone significant changes. Crapo and Sen. Jim Risch, also R-Idaho, cosponsored the “If You Like Your Health Plan, You Can Keep It Act,” which would grandfather all plans established prior to that date.
The health care law requires small group and individual plans to cover 10 so-called essential health benefits, including maternity, mental health, pediatric dental and other areas commonly missed by insurance. Small employers with under 50 workers, however, aren’t obligated to offer coverage. ACA critics fear it may become more attractive for small business employers to drop coverage and send workers to new, subsidized public health exchanges.
Idaho is scheduled to release its first estimates on participation in the exchanges by the end of this month.
Ballard insures her own family and five full-time workers with her dairy’s dental and health care policy.
“We have really good insurance. I don’t understand what we don’t have that is so wonderful,” Ballard said. “I think the hardest part is the unknown. I’ve got to talk to my accountant. I’ve got to talk to my insurance guy.”
Crapo spokesman Lindsay Nothern believes legislation to grandfather in more policies would pass the Senate — indeed, Sen. Mary Landrieu, D-La., introduced her own grandfathering bill — but Democratic leadership won’t take the bills up for a vote.
David Wilcox, the president of Magic Valley Insurance in Twin Falls who sold Ballard’s policy, estimates 98 percent of Idaho small group and individual health plans don’t meet the minimum standards of the federal health care law.
“The challenge was we had six to eight months to determine how to keep insurance affordable. We were doing these types of changes and told retroactively, ‘If you make those types of changes, you’re no longer grandfathered,’” Wilcox said. “There’s a very strong incentive to drop coverage, not that it’s not good coverage.”
Idaho Department of Insurance spokeswoman Tricia Carney agrees Wilcox’s 98 percent estimate “may be fairly accurate.”
“Most of the existing plans do not completely meet the new federal guidelines and so will be discontinued, and new plans will be introduced,” Carney said.
Regence BlueShield of Idaho estimates 6,500 small groups won’t be able to keep current plans, affecting about 62,000 members. On the individual side, approximately 20,000 BlueShield members will not be grandfathered, compared with 2,500 plans that will be unaffected. Policy holders who take no action upon receiving notification that their plans don’t meet ACA requirements will automatically be renewed with a compliant policy.
“We needed to make our decisions regarding our small group policies within months of the ACA’s passage, well before federal regulations and guidance offered any clear answers in dozens of related areas,” said BlueShield sales represenative Todd Bateman
Nationally, Chris Condeluci, an insurance expert who helped draft provisions of the health care law as former Republican tax counsel to the U.S. Senate Finance Committee, said projections show 60-75 percent of small group health plans will lose their grandfathered status due to significant changes by 2016.
Condeluci isn’t surprised by the cancellations, which he said were intended by both Congress and the White House to weed out policies deemed inadequate.
“The problem here is the president was telling the public, ‘You can keep your plan, no matter what,’” Condeluci said. “What he should have said was, ‘You can keep your plan so long as it meets minimum standards.’”