Health Insurance Rate Increases – What To Do About Grandfathered Health Plans?

Recently we’ve been speaking to a number of you that have old health insurance plans that you’ve stayed with for ten or more years.  These older plans are known as “GrandFathered Health Plans” by the Affordable Care Act (ACA), and have special exemptions with respect to ObamaCare.  

The dilemma you are currently facing is what to do about the large price increases you’re about to experience.  Should you stick with the grandfathered health plan or change to a lower cost health insurance plan?  We’ll cover the tradeoffs between staying or switching plans, review the changes that have occurred, and give you our recommendations in this post.

Barry’s Grandfathered Health Plan Story

We got a call from Barry the other day, and he was very concerned because their Anthem Blue Cross plan was going up over 20% and he was going to be looking at a $1389 bill each month for he (age 62) and his wife (age 52) and their two daughters (ages 16 & 21). He said they had been in the PPO Share plans for years, and had been seeing steady premium increases during that time, and they switched to a higher deductible 5000 plan four years earlier to help keep the premium costs down.

Barry said he had phoned his agent and also called Anthem Blue Cross and both had told him he should just “ride it out” and see what happened after 2014. Barry didn’t like that idea, because the costs had finally reached the breaking point for his family. That was when a friend suggested he call us at SPF Insurance.

I had a short discussion with Barry in which I asked about the health characteristics of his family, and shared some of the reasons why the rates on his old PPO Share plan were going up so fast. Then we started looking for alternative plan options that would reduce his costs.

Barry’s Story
Barry’s family was healthy and did the usual preventive care and maybe one or two office visits if someone had a bad cold. So using those parameters, I ran the quotes and found that one of the better options for Barry’s family was the Health Net Advantage PPO 3500 plan for $480/mo. That was a savings of $909/mo or $10,908 for a year. Then I selected a plan that was closer to the benefit level they had in their current plan and described the Cigna Open Access Value 5000/100% plan for $928/mo (a savings of $461/mo or $5,532 each year). Barry was obviously relieved to hear that there were lower cost solutions for his family, however, he wanted to make sure he was not overlooking something.

So Barry asked me about what he would be giving up if he switched from his grandfathered health insurance plan. Here’s what I shared with him.

Click on page 2 below to find out what I told him…