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More Health Care Mythbusting

Posted on by Karina

Republicans and opponents of health care reform continue to push out misinformation about the Affordable Care Act–the historic health insurance reform legislation signed into law by President Obama in March.

The latest myth:

Instead of “you like your plan, you can keep it,” as the President promised, new draft regulations mean up to 69 percent of employers may be forced to change their plans.

In fact, the new regulations carefully balance ‘grandfathering’ protections for existing employer-provided plans with the rights of consumers to have new protections from the whims of insurance companies–the new regulations are written to encourage employers not to significantly increase costs on their workers or significantly change their benefits in order to keep their grandfathered status.

Secretary of Health and Human Services Kathleen Sebelius blogging on WhiteHouse.gov yesterday:

The new regulation will expand new consumer protections to all Americans with health insurance, moving us toward the competitive, patient-centered market of the future. This rule reflects the President's policy that Americans should be able to keep their health plan and doctor if they want.

Here's how the new rule will work:

Starting with health plan or policy years beginning on or after September 23, Americans with private health insurance plans will get some new consumer protections. For example, insurance companies will be prohibited from putting lifetime limits on your coverage. And they'll no longer be able to cancel your insurance when you get sick just by finding an error in your paperwork.

Health coverage that was in effect when the Affordable Care Act was enacted will be exempt from some provisions in the Act if they remain “grandfathered” under a provision in the law. Under the rule issued today, employers or issuers offering such coverage will have the flexibility of making reasonable changes without losing their “grandfathered” status. For example, employers will be able to make some changes to the benefits their plans offer, raise premiums or change employee cost-sharing to keep pace with health costs within some limits, and continue to enroll new employees and their families.

However, if health plans significantly raise co-payments or deductibles, or if they significantly reduce benefits — for example, if they stop covering treatment for a disease like HIV/AIDS or cystic fibrosis — they'll lose their grandfathered status and their customers will get the same full set of consumer protections as new plans.

The bottom line is that under the Affordable Care Act, if you like your doctor and plan, you can keep them. But if you aren't satisfied with your insurance options today, the Affordable Care Act provides for better, more affordable health care choices through new consumer protections. And beginning in 2014, it creates health insurance exchanges that will offer individuals and small businesses better, more affordable choices.

Read the fact sheet on how the ‘grandfather’ rule works»

Q&A on how the ‘grandfather’ rule works»

The non-partisan PolitiFact.com also fact checked a chain email making the rounds claiming “most people, even retirees, will see big tax increases next year thanks to President Barack Obama’s new health care law, because it will start taxing health insurance as regular income.” The myth:

Starting in 2011, “you will be required to pay taxes” on “the value of whatever health insurance you are given by the company.”

PolitiFact rates this a “pants on fire” lie explaining:

The chain e-mail is correct that employers will be required to start listing the cost of insurance. The requirement starts for the tax year 2011, so employees will see it on the W-2s they receive in 2012.

But that amount will not be taxed. Current law excludes health insurance from taxable income, and there’s nothing in the health care law that changes that.

Several experts on health care benefits and the workplace confirmed that. “It will not affect your taxable income under the new law,” said Dallas Salisbury of the Employee Benefit Research Institute in an e-mail interview.

We looked up the Kiplinger letter and couldn’t help noticing that the article states the following: “A requirement that businesses include the value of the health care benefits they provide to employees on W-2s, beginning with W-2s for 2011. The amount reported is not considered taxable income.”

Got that? “Not considered taxable income.”

So the e-mail’s own evidence refutes its premise.

The e-mail is correct that employers will have to let employees know how much their health insurance costs the employer. But the e-mail’s main point — and the fact that we’re checking here — is that you will be taxed on your health insurance. That is not only wrong, but refuted by its own reference. Assuming the e-mail’s author read that Kiplinger entry, we can only conclude that this is a deliberate attempt to upset and mislead voters. This sort of fear mongering rates a Pants on Fire.

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