Should You Keep Your Grandfathered Health Insurance Plan or Switch to an Obamacare?
Four things to consider deciding whether to keep your health plan.
Dec. 9, 2013 — -- intro: Having quality, affordable health insurance is an important concern for many Americans—but what defines quality, and how can you find the best price? Many Americans have grandfathered health plans (those that existed by March 23, 2010, and have not since changed substantially), but with the rollout of Affordable Care Act (ACA) plans, switching to a new plan may be a smart option.
As part of the ACA, essential health benefits were defined, but knowing the services included in your insurance plan is only a small part of the battle. To find the best insurance plan for you—whether it is your current health plan or a new ACA plan—you will need to make comparisons across several factors. Here's how to tell if your plan is grandfathered.
quicklist:title: Compare Monthly Premiumstext: You will first want to note how much a new health insurance plan will cost as opposed to your current plan. The factors that drive premiums for all plans include location, age and family size. If you have pre-existing conditions, the premium for your current plan may be higher than for a marketplace plan that cannot charge more for these conditions.
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Marketplace plan premiums will also vary by metal tier, with higher tiers charging higher premiums.
Under the ACA, you may also qualify for premium assistance. If your income is within a certain range, you will receive a tax credit that can greatly reduce the cost of monthly premiums for a qualified marketplace plan.
quicklist:title: Compare Out-of-Pocket Costs text: Aside from monthly premiums, you should also consider the cost of deductibles, coinsurance, copays, and prescriptions. Out-of-pocket costs in the ACA marketplace vary by metal tier; you will pay lower premiums for lower tiers at the expense of higher out-of-pocket expenses, and vice versa for a higher tier. Keep in mind that a grandfathered plan may not include the benefits of a new plan, such as free doctor visits and preventive screenings, so this may add to your costs if you decide to stick with an existing plan.
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To best estimate your needs, start by asking yourself how often you plan to visit the doctor and how many prescriptions you will require in the coming year. This does not consider serious accidents or illnesses, which will certainly require you to pay more under higher-deductible plans. Next, compare your Explanation of Benefits for your grandfathered plan to the new marketplace plans, looking specifically at out-of-pocket expenses.
quicklist:title: Compare Plan Typetext: Don't let metal tiers distract you from the important choice between plan types. Is your current plan a PPO? HMO? EPO? Would you like to change to another type of plan or would you prefer a similar plan? Perhaps you don't have the slightest inclination as to what any of these acronyms means—this is the perfect time to find out which health insurance plan type best fits your healthcare needs. Having a basic understanding of these types will also help you to better assess out-of-pocket costs and your network options.
quicklist:title: Compare Network Sizetext: Finally, you should compare network size between plans. This may require you to do a little legwork on the Internet or over the phone, but it is an important step in determining whether a new plan will allow you to continue to visit the doctors and hospitals you prefer. Some ACA plans are restricting the hospitals and doctors included in their networks, so an old plan might have a larger network than a new ACA plan, even with the same insurance company.
This work is the opinion of the columnist and in no way reflects the opinion of ABC News.
Napala Pratini writes for NerdWallet Health, a website that empowers consumers to find high quality, affordable health care and insurance.
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