This week, the Trump administration released proposed rules that would make it easier for small businesses and the self-employed to band together to buy association health plans.
Supporters say the plans will provide more affordable coverage. But critics say any savings these plans might offer would come at a cost: namely, skimpy coverage and a weaker individual market.
The proposed new rules are aimed at association health plans — plans in which small businesses in the same industry group together to buy insurance coverage and get cheaper rates.
The proposed changes would expand who can opt into these plans by allowing associations to form according to geography, not just industry. They also would unravel regulations the Affordable Care Act had placed on these plans.
The state director for the National Federation of Independent Business, David Clough, says he needs to examine the proposals further, but he’s optimistic they’ll benefit small businesses.
“NFIB supports measures that give small-business owners more options to provide health insurance to their employees, as well as measures that make health insurance more affordable,” he says.
A spokeswoman for Republican U.S. Sen. Susan Collins of Maine echoed that sentiment, and said that Collins will carefully evaluate the proposals.
But independent health policy consultant Mitchell Stein is skeptical they’re an improvement on plans that historically haven’t had the best reputation.
“Before the ACA, these were plans that were really very suspect,” he says.
Stein says they often didn’t cover a lot of benefits.
“They were very good at selecting who they did and didn’t cover,” he says.
The ACA changed that by requiring association health plans to cover essential health benefits, such as prescription drug coverage and mental health care. But the Trump administration’s proposal unravels those protections by allowing association health plans to be treated like large employer plans, which aren’t required to provide essential benefits.
That means plans could once again offer less coverage for a cheaper price.
“[That] weakens the risk pool by drawing out young and healthy people who will no longer be covered by the individual ACA plans,” Stein says.
Ed Feibel, an employee benefits attorney with Eaton Peabody in Portland, says that’s a valid concern. He says if you pull people out of one market into another, the market they’re being pulled out of — in this case, the individual market — would be adversely affected because there will be fewer people in that pool.
“That’s likely to drive up rates in that part of the market. Is it going to drive rates down in the large group market? Well, not across the board, because each large group gets rated on its own,” he says.
Feibel says some consumers could get decent coverage that’s affordable, but only to a point.
“I don’t think it’s going to make it so much more affordable for so many people,” he says.
And Steve Butterfield of Consumers for Affordable Health Care says rolling back consumer protections aren’t worth it.
“People may find a path to lower premiums through these, but as we relentlessly remind folks, insurance is about more than just your premiums. And if you’re paying less and also getting less and this thing that you buy into isn’t there for you when you need it, then what are you paying for?” he says.
The public has 60 days to comment on the proposal.