U.S. sets rules for employer healthcare plans

WASHINGTON Tue Jun 15, 2010 9:58am EDT

U.S. President Barack Obama answers a question during a news conference in the East Room of the White House in Washington, May 27, 2010. Obama promised on Thursday to hold BP accountable in the catastrophic Gulf of Mexico oil spill and said his administration would do everything necessary to protect and restore the coast. REUTERS/Kevin Lamarque

U.S. President Barack Obama answers a question during a news conference in the East Room of the White House in Washington, May 27, 2010. Obama promised on Thursday to hold BP accountable in the catastrophic Gulf of Mexico oil spill and said his administration would do everything necessary to protect and restore the coast.

Credit: Reuters/Kevin Lamarque

WASHINGTON (Reuters) - The Obama administration on Monday announced new rules it said would protect Americans who want to keep their current health insurance but critics say the changes could end up causing millions to lose their coverage.

Part of President Barack Obama's healthcare overhaul, the new regulations are meant to discourage companies from making major changes in health insurance benefits.

Health Secretary Kathleen Sebelius said the new rules "make good on the president's promise that Americans can keep their health plan and doctor they like under the new law."

The healthcare reform bill, approved in March after a divisive year-long fight in Congress, exempts insurance plans that existed when the law was passed from implementing some of the healthcare reforms.

The so-called grandfather rule announced by Sebelius lets employers and insurers make routine changes to plans. But if they significantly cut benefits or increase out-of-pocket spending for consumers the companies can lose the exemption.

The rules announced on Monday are part of a series of steps toward implementation of a new law to expand coverage to 32 million uninsured Americans by 2014 and ban certain insurance practices like denying coverage for preexisting conditions.

The changes are being closely watched by investors to see how they will affect the health insurance industry, which includes companies such as Aetna Inc, Cigna Corp and UnitedHealth Group Inc, among others.

About 176 million Americans have employer-sponsored insurance. Companies who lose grandfather status will have to implement reforms like ensuring coverage of preventative care and access to some doctors without a physician referral.

Republicans and groups representing small business owners sharply criticized the strict regulations.

They cited a government analysis that showed up to 80 percent of the 43 million employees of small businesses could lose their exempt status in the next few years.

"ObamaCare's new tagline should be 'if you like your health care plan, too bad,'" said House Republican leader John Boehner. "These job-killing mandates will bring every small business's worst nightmare -- losing their health care coverage -- closer to reality."

The National Federation of Independent Business said small companies will be particularly hard hit if faced with sharp increases in insurance premiums as expected.

"These rules limit flexibility and severely restrict the last line of defense for an employer before making the difficult decision of having to employ the nuclear option: dropping coverage all together," said the group's vice president, Susan Eckerly. "This is another heartbreaking and discouraging outcome from this new healthcare law."

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Comments (4)
rebeltoady wrote:
The already experienced job killers are accusing healthcare reform of job killing, what a joke. If a job can be killed, business has already killed it.

Jun 15, 2010 10:40am EDT  --  Report as abuse
old409 wrote:
At one time, before government got its nose into every aspect of our lives, there were jobs everywhere. After fifty years plus of strong government interference and unions,the jobs have left here for greener pastures.

Our country survived pretty well the first 200 years or so without health insurance and now all of a sudden we can no longer get along without health insurance and the government watching over both shoulders. I’ve seen the people of our country go from a proud people that could take care of themselves to a people that can’t even stand up without some sort of government help. We are losing our Freedom, we are losing our country. But, people that can’t take care of themselves deserve neither Freedom or a country.Can you take care of yourself without government help?

Jun 15, 2010 12:17pm EDT  --  Report as abuse
anthony9456 wrote:
People that can’t take care of themselves or without the help of government don’t deserve themself or a country? Wow, really? People like you make people who denounce this bill terrible. It all has to do with Obama and the stooges’ wording and sly statistics. They say that thirty-plus million Americans will be covered. Well, with an assessment like that– you’d assume they want/need coverage. The answer is nope, it’s cheaper without coverage for those individuals, and if those individuals were to get coverage it would kill their business that gives them the opportunity to have coverage with this healthcare overhaul. So there is a host of issues that need to be addressed, coercing healthcare isn’t a cure or a silver bullet. An ounce of prevention is worth a pound of cure and The Obama administration is proposing a cure that is riddened with poison. Listen, you cannot force people to do things it’s that simple. Only boots on the ground, the individuals know what can/cannot be done. This frack’n broad breast feeding is ridiculous; government needs a new place: a mental house for one!

Jun 15, 2010 12:43pm EDT  --  Report as abuse
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