Article from Reason by Brian Doherty.
Sen. Rand Paul (R-Ky.) is happy today that what he calls his “months” of work with President Trump and Secretary of Labor R. Alexander Acosta have led to finalizing rules for expanding the availability of Association Heath Plans (AHP). Paul calls AHPs a “pro-patient, pro-worker, and pro-family solution” and “one of the most significant free market health care reforms in a generation.”
The Labor Department’s announcement sums up what problems AHPs are meant to solve and how they are meant to work:
The percentage of small businesses offering healthcare coverage has been dropping substantially. For the self-employed, the individual market exchanges do not offer affordable coverage either; premiums more than doubled between 2013 and 2017 with deductibles increasing even more.
This reform allows small employers – many of whom are facing much higher premiums and fewer coverage options as a result of Obamacare – a greater ability to join together and gain many of the regulatory advantages enjoyed by large employers.
Under the Department’s new rule, AHPs can serve employers in a city, county, state, or a multi-state metropolitan area, or a particular industry nationwide. Sole proprietors as well as their families will be permitted to join such plans…These plans will also be able to reduce administrative costs and strengthen negotiating power with providers from larger risk pools and greater economies of scale….
The Congressional Budget Office (CBO) estimates that millions of people will switch their coverage to more affordable and more flexible AHP plans and save thousands of dollars in premiums. CBO also estimates that 400,000 previously uninsured people will gain coverage under AHPs.
The Washington Post, reporting today on the new rules, notes that this Trump administration action will “allow plans to exclude coverage for maternity care, prescription drugs, mental-health services and other ‘essential health benefits’ the ACA requires of coverage sold to individuals and small businesses…Congressional Democrats and critics across the health-care industry say the availability of cheaper, skimpier coverage will leave some patients stranded when they get sick.”
The AHPs will be “phased in for coverage sold from September to April” and “may not charge more or refuse to cover customers with preexisting medical conditions…But the plans will have more freedom to charge different prices depending on customers’ ages, genders and locations — something ACA coverage cannot do.”
Read the entire article at Reason.
Image Credit: Gage Skidmore [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons