TUESDAY, JUNE 15, 2010


New rules issued


on health insurance Plans ‘grandfathered’


under law could lose their protected status


by David S. Hilzenrath and N.C. Aizenman


If you like your health plan, you can keep it. That’s what Presi- dent Obama promised during the long months of debate over health-care reform. On Monday, the administra- tion issued new rules to fulfill that promise. But your plan might not be quite the same — it could offer more benefits, and it could cost more. The administration estimates


that many plans will end up changing, prompting Republi- cans to accuse the president of breaking his word. The tempest involves an issue known as “grandfathering.” Con- sistent with Obama’s promise, the legislation said health plans in existence when the law was en- acted are exempt from some of its requirements. But the law left it to the administration to decide how much a health plan can change without forfeiting that ex- emption. The rules issued Monday begin to answer the question. For instance, health plans would lose their protected status if they significantly raise deduct- ibles or other out-of-pocket charges patients pay when they seek medical care.


Some plans require members


to pay a percentage — 20 percent, for example — of the hospital or doctor bill. If plans want to re- main grandfathered, they can’t raise the percentages. For increases in deductibles, the trigger is medical inflation plus 15 percentage points. Employers would lose grandfa- thered status if they switch insur- ance companies — unless the


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High court rules in favor of immigrants Justices oppose


automatic deportation for minor drug offenses


by Robert Barnes Immigrants convicted of minor


drug offenses should not face auto- matic deportation, the Supreme Court ruled unanimously Monday, a decision that could allow thou- sands of legal immigrants the chance to argue for leniency from immigration judges. The court overruled the legal in-


RICHARD A. LIPSKI/THE WASHINGTON POST


plan is covered by a union con- tract or the employer pays claims out of its own funds and uses the insurer only to administer the plan. It isn’t clear how much the re-


President Obama introduced his health-care plan at a joint session of Congress in September. To the extent that plans losing


grandfathered status do not al- ready offer those benefits, their costs could increase. “This is not only bad news for


strictions on co-payments and deductibles will save consumers, because health plans can still raise premiums. The rules issued Monday say plans would relin- quish grandfathered status if they reduce the percentage of the premium they pay by more than five percentage points. The broader health-care law includes checks on unreasonable increas- es, which have not been defined. The administration estimated


that by 2013, health plans cover- ing as few as 39 percent and as many as 69 percent of employees could lose protected status. For small employers, the total could be as high as 80 percent; for large ones, it could reach 64 percent. Those plans would then have


to offer benefits required of new plans, such as fully covering cer- tain preventive services and guaranteeing access to OB-GYNs. Beginning in 2014, non-grandfa- thered plans covering individuals and small groups would also have to offer at least a minimum ben- efits package as defined by the government.


the vast majority of Americans who like the plans they have. It also flatly contradicts the presi- dent’s repeated promises,” Senate Minority Leader Mitch McCon- nell (R-Ky.) said on the Senate floor. Health and Human Services


Secretary Kathleen Sebelius said in an interview that Obama “wanted to make sure as much as possible that if people had plans that they liked they got to keep them and balance that with, you know, some overall protection for consumers.” Obama’s frequently repeated promise about keeping your cov- erage if you like it was problemat- ic. Health plans routinely make changes. If the overhaul works as intended, many small businesses would send workers to new mar- ketplaces called exchanges, where they could find more and better options. Over time, the ex- changes could be opened to large employers, too. The promise helped reassure a public nervous about change, but it also gave Obama’s critics politi- cal ammunition.


Losing grandfathered status could be a bigger deal for small businesses than for large busi- nesses because small employers’ health plans could have more ground to make up to come into compliance. Industry representatives said it was too soon to tell how much. “The reality is, we’re going to


have to take a closer look at these rules,” said Kathryn Wilber, sen- ior counsel for health policy at the American Benefits Council, whose member companies spon- sor or administer health plans. “They’re a little more complicat- ed than we would have liked, and it’s really a plan-by-plan specific decision.” Judging the stakes is also com-


plicated by the fact that rules im- plementing other aspects of the health-care overhaul have yet to be hammered out by regulators. “For example, the law gives


very little insight on what types of internal and external claims pro- cedures a [non-grandfathered] plan would have to have in place,” said Kelly Traw, a lawyer with Mercer, a human resources con- sulting firm. “It also does not spell out which preventive ser- vices a plan might offer.” hilzenrath@washpost.com aizenmann@washpost.com


terpretations of the federal govern- ment and a lower appeals court in saying that Jose Angel Carachuri- Rosendo should have had a chance to make his case for staying in the country. Carachuri-Rosendo, a legal resi- dent who had lived in the United States since he was 5, was deported to his native Mexico after being convicted of possessing a single tablet of Xanax, an anti-anxiety drug, and serving a 10-day sen- tence. He had been convicted of possessing a small amount of marijuana a year earlier and re- ceived a 20-day sentence. In an opinion by Justice John


Paul Stevens, the court said that was not what Congress had in mind when it mandated automatic deportation for any immigrant convicted of an aggravated felony. The government had said that Ca- rachuri-Rosendo’s second convic- tion put him in that category, even though local prosecutors did not increase the second offense to a drug-trafficking charge. “We do not usually think of a 10-


day sentence for the unauthorized possession of a trivial amount of a prescription drug as an ‘aggravat- ed felony,’ ” Stevens wrote. Im- migrants who break the law should receive the chance to plead their case before an immigration judge rather than face automatic deportation, he said. Manuel Vargas, senior counsel


for the Immigrant Defense Project, said that would mean immigrants could ask a judge to consider fac- tors such as their length of time in the United States, military service, and family and community ties. Il-


legal immigrants would still face virtually automatic deportation, he said.


Carachuri-Rosendo, who is in his early 30s, was deported even though his common-law wife, four children and other family mem- bers are U.S. citizens. The case is Carachuri-Rosendo


v. Holder. The court also dealt second chances in another case. It said a death-row inmate from Florida deserves another opportu- nity to have federal courts review his sentence because his lawyer did not meet a filing deadline. The U.S. Court of Appeals for the


11th Circuit in Atlanta had ruled that even if Albert Holland’s attor- ney Bradley M. Collins was “gross- ly negligent” in missing the dead- line, the law didn’t afford Holland, who was convicted of killing a po- lice officer, another chance. Feder- al law requires that the lawyer must have exhibited “bad faith, dishonesty, divided loyalty, mental impairment or so forth” to file a pe- tition after the deadline. “In our view, this standard is too


rigid,” Justice Stephen G. Breyer wrote in the court’s 7-2 opinion. Breyer noted numerous exam- ples of Holland’s efforts to get the lawyer to file by the deadline and pointed out that in some cases, Holland’s legal interpretations were right and Collins’s were wrong. “The case before us does not involve, and we are not consid- ering, a ‘garden-variety claim’ of at- torney negligence,” Breyer wrote. Justices Antonin Scalia and


Clarence Thomas dissented. Scalia said that although the court’s “im- pulse to intervene when a litigant’s lawyer had made mistakes is un- derstandable,” precedent demands a finding that the petitioner is “out of luck.” The case is Holland v. Florida. The court also accepted Califor-


nia Gov. Arnold Schwarzenegger’s challenge of a special federal judi- cial panel’s decision that the state must reduce its prison population by 46,000 inmates over the next two years. The court will hear the case in the term that begins in the fall, and the order is on hold until the justices decide the issue. The case is Schwarzenegger v. Plata. barnesbob@washpost.com


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