The Heritage Foundation
July 5, 2012
On several occasions during the health care reform debate, President Obama promised the American people, “If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.” Now, even the Administration admits that this isn’t the case, stating that “as a practical matter, a majority of group health care plans will lose their grandfather status by 2013.”
Case in point: Under Obamacare, grandfathered plans are not subject to the preventative services mandate, a subset of which is the anti-conscience mandate that requires almost all non-exempted employers to provide and pay for abortion-inducing drugs, contraception, and sterilization.
In one of the 23 lawsuits over the mandate’s trampling on religious liberty, Newland v. Sebelius, the plaintiffs argue that the mandated coverage of these products violates the religious freedom guaranteed by the First Amendment because it forces employers, including those who object to use of such products on moral or religious grounds (for example, religious hospitals, schools, and charities) to pay for coverage of the objectionable drugs and services. There is only a narrow religious exemption that effectively applies only to places of worship.
Arguments over the constitutionality of this infringement on religious freedom aside, the Administration admits in its legal response to the Newland complaint, “Even under grandfathering, more and more group health plans will be subject to the regulations as time goes on. Defendants estimate that, as a practical matter, a majority of group health plans will lose their grandfather status by 2013.” It concludes that “more women would enjoy coverage of recommended preventive services as fewer plans are eligible for grandfather status.”
The defendants cite the Federal Register final rules on grandfathered plans, which states that the “mid-range estimate is that 66 percent of small employer plans and 45 percent of large employer plans will relinquish their grandfather status by the end of 2013.” They also include high-end estimates that 80 percent of small employer plans and 64 percent for large employer plans will lose grandfathered status.
The reason: Obamacare puts employers with grandfathered plans in a box. If they make changes to their plans to control increasing costs, they will lose their grandfathered status. Alternatively, if they keep grandfathered status by not making changes, their plans will eventually become unaffordable, forcing them to give them up. Either way, their employees will eventually lose their current coverage.
As more Americans lose their existing insurance, their new plan will be subjected to Obamacare’s overreaching regulations, mandates, and violations of religious liberty. This is just one of Obamacare’s many broken promises.