“Because grandfathered plans are subject to many of PPACA’s requirements, employers today are forced to pay more to keep their current grandfathered plans, shop for more expensive plans, or drop coverage for their employees altogether,” Pitts said.
Testifying before the subcommittee, Steve Larsen, deputy administrator and director of the CMS’ Center for Consumer Information & Insurance Oversight, emphasized that grandfathered plans must still eliminate lifetime limits, cover most adult children until age 26 and abide by consumer protections such as the medical-loss ratio—all provisions outlined in the Affordable Care Act. Pitts said a so-called discussion draft of legislation would prevent HHS from imposing any regulations on grandfathered plans.
Meanwhile, the subcommittee’s majority members asserted that the medical-loss ratio—which requires plans to spend at least 80% of premium dollars on medical care—is hampering job growth, especially for insurance agents and brokers. Not so, according to Rep. Jan Schakowsky (D-Ill.), who cited statistics from the Insurance Information Institute that the number of insurance agents and brokers increased by 5,500 between July 2010 and July 2011.
In June, Reps. Tom Price (R-Ga.), who is a physician, and Cathy McMorris Rodgers (R-Wash.) proposed legislation to repeal the MLR, which has been referred to the Energy and Commerce Committee.