House Bill to Expand “Grandfathering” of Individual-Market Plans Would Raise Premiums in Insurance Marketplaces and Undermine Market Reforms
 Under current law, people who were enrolled in individual-market plans as of March 23, 2010 (the date of the ACA’s enactment) are allowed to remain enrolled in those plans for as long as the insurer continues to offer them. If plan elements such as benefits and cost-sharing charges do not change significantly (as detailed in federal regulations), these people’s coverage is exempt from many of the ACA’s requirements. Grandfathered individual-market plans cannot add new enrollees, however, other than dependents. Since turnover is high in the individual market, it has always been anticipated that many people who were enrolled in a plan in 2010 and had grandfathered status would no longer have the same plan by 2014, when most of the ACA’s major reforms first apply to the individual insurance market. People who enrolled in non-ACA compliant individual market plans after March 23, 2010 were expected to transition to ACA-compliant plans before or at some point during 2014, such as plans offered through the marketplaces.
 For example, the PacAdvantage small-business pool that operated in California from 1993 to 2006 ultimately ceased operation due to growing adverse selection. PacAdvantage tended to attract people with high medical costs, in part because insurers operating within it were not permitted to charge higher premiums to small firms with less-healthy workers, while insurers in the outside small-group market could do so. Sicker people concentrated in plans offered through PacAdvantage, while small businesses with healthier workers continued to purchase coverage in the outside small-group market. As a result, PacAdvantage premiums climbed ever higher compared to the regular market, making the marketplace less and less attractive to small firms with healthier workers. Eventually, the pool was shut down because PacAdvantage was no longer viable. See Sarah Lueck, “States Should Structure Insurance Exchanges to Minimize Adverse Selection,” Center on Budget and Policy Priorities, August 7, 2010.
 The ACA requires that non-grandfathered, individual-market plans cap enrollees’ annual out-of-pocket costs under the plan — including deductibles, copayments, and coinsurance — at no more than a specified maximum amount. The amount, which is set at $6,350 for a plan covering an individual and $12,700 for family plans in 2014, applies to items and services that are provided in-network and covered by the plan.