In 2009, when President Obama was lobbying for passage of health insurance reform legislation, he made the following statement: "If you like your health care plan, you'll be able to keep your health care plan."
For tens of millions of Americans, that statement still rings true. But contrary to the president's pledge, many other Americans likely will see their current health care plan disappear in 2014.
That is because a large percentage of the more than 14 million Americans who have individual health insurance plans will find their policy doesn’t meet basic requirements as outlined in the Patient Protection and Affordable Care Act.
In fact, more than half of the individual health insurance plans now in place don’t meet health reform's minimum benefit standards, according to a recent University of Chicago study.
Those plans either will need to be amended to meet the new standards, or will be replaced by plans that offer greater levels of care.
And that expanded care will come at a price.
"The new benefits will cause some people who currently have insurance to pay more than they do today," says Clare Krusing, a spokeswoman for America's Health Insurance Plans (AHIP), the national trade association that represents the health insurance industry and whose members provide health benefits to more than 200 million Americans.
Does your health plan provide all “essential health benefits”?
Beginning in 2014, all health insurance policies sold in the United States must provide 10 categories of what the government has deemed "essential health benefits."
Such benefits include maternity care, substance abuse and mental health services, prescription drug coverage, and many other types of care.
In the past, many plans excluded coverage of these types of care. For example, in 2011, 62 percent of people with individual health insurance didn’t have coverage for maternity care, according to the U.S. Department of Health and Human Services.
Meanwhile, 34 percent didn’t have coverage for substance abuse treatment, and 18 percent didn’t have care for mental health services.
Health reform's new requirements mean policyholders whose plans now don’t cover some types of services will have access to better care than in the past, says Kathleen Duffy, a spokeswoman for the Illinois grassroots coalition Campaign for Better Health Care.
"More comprehensive coverage is something we're all going to benefit from," she says.
However, that expanded care is likely to come at a price – literally. Plans with higher levels of care will cost more than the stripped-down plans of the past.
For example, the Wall Street Journal reported that UnitedHealth Group – the nation's largest carrier – recently warned insurance brokers that individual insurance premiums could increase by up to 116 percent next year for some people who currently have individual health plans.
Federal subsidies intended to help make insurance more affordable may reduce the sting of such higher premiums.
"Financial assistance will be available to help qualifying individuals and families pay for coverage," Krusing says.
For example, individuals and families with incomes up to 400 percent of the federal poverty level are eligible for tax credits that can reduce the cost of health insurance. States also have the option to expand Medicaid coverage to people with incomes up to 133 percent of the poverty level.
However, Krusing notes that even with this assistance, many people are likely to pay more for insurance next year than they do now.
What happens if you lose your health plan?
If your plan doesn’t meet the new ACA requirements, you’ll receive a notice from your insurer between now and the end of the year, according to a statement from the National Association of Insurance Commissioners (NAIC).
Each state is determining its own rules for how and when policyholders must be notified.
"Most insurers have filed their plans with state insurance departments, who are reviewing the plans for eligibility," says the NAIC statement. "Once those reviews are complete, insurers will begin notifying policyholders of changes to their plans."
Insurers will have the option of either amending plans so they meet requirements, or eliminating the plan.
If an insurer eliminates your health plan, current rules established by the Health Insurance Portability and Accountability Act (HIPAA) require the insurer to offer a new health plan option to you, according to the NAIC. The only exception to this rule occurs if the insurer decides to stop selling insurance in the market altogether.
Policyholders who don’t like the new plan their insurer offers can look for other options, Duffy says.
"They will be able to enroll in a plan through the health insurance marketplace, which will help them find plans that fit their budgets and meet their coverage needs," she says.
To find out more about the new health insurance marketplace, visit Healthcare.gov.
What is a grandfathered plan?
A relatively small number of policyholders will not be subject to the new ACA rules. Group and individual plans in effect as of March 23, 2010, are "grandfathered" and do not have to provide coverage of all essential health benefits.
However, these plans will lose their grandfathered status if they make certain changes – such as significantly increasing copayments, deductibles or out-of-pocket payments.
Last year, 58 percent of firms offering health insurance had at least one health insurance plan with grandfathered status, according to the Kaiser Family Foundation's annual survey of employer health benefits. That was down from 72 percent of firms in 2011.
Many observers expect that over time, most or all of the grandfathered plans eventually will lose that status.