The recent announcement from Labor Secretary Alexander Acosta about new rules for “association health plans” (AHP) for small businesses and self-employed individuals are barely a month old (see The Beginning Of The End Of Parity) and have already earned a new label—”unworkable.”
That was the description used by the National Federation of Independent Business (NFIB), in a recent article from Politico that noted, “the NFIB, which vigorously promoted association health plans for two decades, now says it won’t set one up, describing the new Trump rules as unworkable.” This reaction has not been uncommon, even among groups that support the idea of AHPs. The National Association of Realtors and the National Retail Federation, who have been advocates of the AHP model, have come out saying that the new rules are too complicated (see Trump Promised Them Better, Cheaper Health Care. It’s Not Happening).
Organizations that work specifically in health care haven’t been any more supportive. The Los Angeles Times reviewed all the comments on the rule, and found that 279 comments came from health care industry organizations, and 266 of those organizations were against the rule (see Trump’s New Insurance Rules Are Panned By Nearly Every Healthcare Group That Submitted Formal Comments). Examples include the American Academy Of Family Physicians (AAFP), which commented that these plans won’t provide meaningful coverage (see Attention: Definition of Employer-Small Business Health Plans); and the Blue Cross Blue Shield Association, which voiced its concern with some provisions of the rule, citing the relaxation of sponsorship requirements and the inclusion of employers with no common-law employees (see RE: Definition Of ‘Employer’ Under Section 3(5) Of ERISA-Association Health Plans). The Blue Cross Blue Shield Association further estimated that premiums for women in their early 30s could be 30% higher, while young men in their early 30s could be 40% lower, than the regular individual and small-group PPACA rates
What does this mean for a health care policy that is constantly changing? There are two concerns I have heard in most conversations that are key. The first is consumer confusion over what the options are for health insurance coverage. Along with all the headlines about the changes to AHPs, a new final rule expanding short-term insurance plans is expected to be released any day (see Fact Sheet: Short-Term, Limited-Duration Insurance Proposed Rule and Short-Term Plans Do Not Cover Life-Saving Mental Health and Substance Use Treatment), there were reductions to the federal funding for the health insurance navigator program that was established under health care reform to assist consumers with health insurance (see CMS Slashes Navigator Funding to Just $10 Million), and a number of other policy changes are expected. Many consumers will find it difficult to understand their insurance options. As we have seen at every level of the health care industry, ongoing consumer education and engagement are fundamental for guiding the best choices.
The second issue really is the possible impact this will have at the state level—both in terms of regulatory budgets and the need to control for fraud. One of the criticisms of AHPs is the potential for fraud and insolvency. Jim Quiggle, spokesman for the Coalition Against Insurance Fraud, was quoted putting this into perspective for an article in Modern Healthcare, “The relaxed federal standards for forming AHPs risk opening the doors wider to a surge of scam operators who will seek to exploit the looser environment” (see Fraud Fears Rise As Feds Expand Access To Association Health Plans). The ability for these plans to operate across state lines will make this even more important at the state regulatory level.
For more on the future of the health care landscape, join us at The 2018 OPEN MINDS Executive Leadership Retreat in Gettysburg, Pennsylvania on September 19, 2018 for the keynote address, “Key Issues Shaping The Market: What Executives Need To Know To Succeed,” by William Lopez, M.D., CPE, Senior Medical Director-Behavioral Health, Cigna Behavioral Health.