December 16, 2017
    Association health plans see new life under Trump's executive order
    By E. Francisco Dalere | 10/12/2017

    President Trump made an executive order today that will resurrect association health plans, which have largely disappeared since the passage of the Affordable Care Act. But there are many answers to be determined before AHPs can be rolled out.

    Under the executive order, small businesses can offer insurance coverage to employees by joining with other small businesses in the same state (or multi-state metro area), or with other businesses in the same industry in states across the country, or through a trade association or professional group. By joining forces, this will allow the businesses to act like a large group plan, which will allow them to offer insurance across state lines. (But even before the ACA did in AHPs, not many were in existence, due largely to the challenges of offering plans across state lines.)

    In addition to AHPs, the president also wants to extend short-term plans, which were pinned back to three months by ACA. Previously, short-term plans could last a year.

    Much of the criticism toward today’s executive order sounded like the criticism leveled at AHPs back when President George W. Bush included them in his healthcare plans, though they never passed the Senate. Critics say AHPs would siphon off healthy people in search of less expensive health plans than those under the ACA. To be less expensive, AHPs likely will not cover all of what is mandated by ACA, which some people may believe do not directly benefit them.

    The key question regarding today’s AHPs is how the Labor Department will define “association,” ASAE public policy SVP Jim Clarke, CAE, said. He said today’s remarks by the president indicate employers or individuals can come together to create an “association.”

    “There are specifics that need to be looked at” regarding the executive order, Clarke said. “We’re cautiously looking to see what the details are and if it will be something that is good for associations to be engaged in.”

    It will be up to U.S. Labor Secretary Alexander Acosta to determine if individuals can buy insurance through such AHPs. In a written statement, Acosta said, “We look forward to working with the secretaries of Health and Human Services and Treasury as we consider reforms that will expand access to high-quality healthcare at affordable prices for the American people.”

    The executive order does not change existing law, but directs agencies to issue new regulations. This could take months, including a comment period.

    ASAE has been following the progress of S1818, proposed by Sen. Mike Enzi, R-Wyo., “to do some of these things legislatively,” he said.

    National Federation of Independent Business CEO Juanita Duggan said, “In the wake of the Senate’s failure to repeal Obamacare, we are grateful to President Trump for addressing regulations that make it harder and costlier for small business owners to provide healthcare for themselves and their employees. The cost of healthcare has been the number-one problem for small businesses for more than 30 years. NFIB has fought to remove penalties on small businesses for helping their workers buy health insurance, and the President’s action today advances that effort.”

    NFIB was a proponent of the American Health Care Act, the failed legislation designed to repeal and replace ACA.

    National Restaurant Association CEO Dawn Sweeney weighed in, saying, “Association health plans are a critical tool that will significantly expand affordable, employer-sponsored health insurance. By allowing small businesses and individuals to join together to access health insurance through their association memberships, President Trump’s executive order provides more opportunity for Americans to purchase affordable healthcare coverage for themselves and their families.” Sweeney is the TRENDS 2016 Association Executive of the Year.

    America’s Health Insurance Plans spokeswoman Kristine Grow said AHIP is concerned about the potential effect of AHPs. “Health plans remain committed to certain principles. We believe that all Americans should have access to affordable coverage and care, including those with pre-existing conditions. We believe that reforms must stabilize the individual market for lower costs, higher consumer satisfaction, and better health outcomes for everyone. And we believe that we cannot jeopardize the stability of other markets that provide coverage for hundreds of millions of Americans.

    “We will follow these principles…as we evaluate the potential impact of this executive order and the rules that will follow.”

    In his remarks this morning, Trump characterized the ACA, also called Obamacare, as anything but affordable, saying 28 million people were “left behind” by the healthcare law.

    Premiums under Obamacare have “outrageously increased” he said at a news conference before he signed the order. He noted that premiums in Alaska have gone up by 200 percent.

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