For some, keeping an existing policy will be best option. For some others purchasing a new policy that is effective in 2013 will be the best option. I will try to outline the advantages and disadvantages of these options and contrast them with the other options discussed on my previous two blog posts.
The posts in the series are:
- Buying on the Connecticut Health Insurance Exchange (or Marketplace)
- Buying an Off Exchange Policy
- Buying a “pre-ObamaCare” policy (only available for effective dates before 1/1/2014)
Policies purchased in 2011, 2012 or 2013 will not be considered grandfathered plans. Your insurance company may let you keep those plans for one more year at the most. Many of these policies cannot be kept past December 31, 2013. Check with your agent or the company to see how long you can keep your present policy.
Obamacare and Grandfathered Plans
Plans purchased in 2009 and before as well as some policies purchased in 2010 are likely to be considered grandfathered. This means that your insurance company may allow you to keep the plan for 2014 and beyond. However, some companies are not allowing policyholders to keep these older policies.
However, keeping such a plan may not be the best option for you. All grandfathered plans are at least three years old as of this writing and have probably experienced several rate increases since their inception. If you qualify for a subsidy, it is unlikely that keeping a policy this old will be your best option. If you do not qualify for a subsidy, it may or may not be.
You cannot get a subsidy for a grandfathered policy or any policy purchased outside of the health insurance exchange (or marketplace). This means that if you qualify for a subsidy, you should get price quotes for on-exchange plans. (Call us. We can answer your questions about purchasing on the health insurance exchange and help you enroll if you choose. We can calculate your subsidy and give you on-exchange and off exchange quotes over the phone in just a couple of minutes.)
Purchasing a 2013 Policy
If you can pass the health screening, do not have a grandfathered policy and do not qualify for a subsidy, you will probably do best by purchasing a policy with a 2013 effective date. Why? The rates for 2014 will be higher than the current rates. Without a subsidy, your net cost will almost certainly be higher if you purchase a 2014 policy.
Even if you already have an existing policy, purchasing a new policy that is effective in 2013 may be to your advantage. Unless your policy is grandfathered, you will lose the coverage on the anniversary date. Purchasing a new policy that is effective in December of 2013 may be the best way to avoid paying the higher rates for as long as possible.
You will only be able to keep a newly purchased policy that is effective in 2013 for one year. However, you may save $200 or more each month during that year.
After the year is up, you can shop for other options. We hope that you will give us the opportunity to answer your questions about the Affordable Care Act, grandfathered plans and plans available for 2013 effective dates. As well as plans available for 2014, 2015 and beyound.
How Can We Help?
Please call us with your questions. One or both of us should be available seven days a week from 9:00 in the morning until 9:00 in the evening six or seven days a week until the end of the year.