Trump Administration Issues Final Association Health Plan Rule
Today, the Trump Administration released a final rule expanding the scope and applicability of association health plans (AHPs). The Department of Labor’s rule implements President Trump’s October 2017 executive order which directed agencies to change existing regulations to provide consumers with more options for health care coverage.
The I Am Essential coalition previously submitted comments on the proposed AHP rule, signed by 118 patient groups, expressing concern about the impact AHPs will have on access to quality, affordable healthcare for consumers and the stability of the individual and small group markets. Since AHPs are not required to abide by most of the Affordable Care Act’s (ACA) consumer protections and insurance market rules, plans will be able to institute discriminatory benefit designs and risk access to healthcare, particularly for people with serious and chronic health conditions.
Health insurance is intended to help beneficiaries pay for the care they need and provide financial protection in the event of an unexpected illness or injury. However, since AHPs are not required to cover the ACA mandated ten essential health benefit categories, including prescription medications, nor do they have to cover certain classes of drugs — such as those that treat mental illness, HIV, hepatitis, or cancer — beneficiaries will be surprised that if a certain drug or service is not covered, they will be on the hook for those costs.
Since health status is dynamic, the patient groups wrote in their comment letter that “individuals must have access to the full array of Essential Health Benefits for health insurance to be meaningful and so they can be assured that what they need, or might need in the future, will be covered.”
In their comments they added, “AHPs would not be subject to the caps on consumers’ out-of-pocket maximums for deductibles, copays, and co-insurance. This would perpetuate the trend of healthcare costs outpacing income increases for the average family.”
The anticipated effects of the Administration’s actions have already created uncertainty in the marketplace as is evident by the increase in uninsured rates and rise in proposed premiums for 2019 in many states. I Am Essential fears that addition of AHPs through this rule will further destabilize the market. Creating an even playing field ensures risk is balanced which is necessary for the insurance marketplace to be sustainable.
Finally, clear enforcement authority over AHPs remains ambiguous and presents a challenge as regulators grapple with plans sold across state lines. In the past these plans have been easy vehicles for fraud. For these reasons, I Am Essential is concerned that history will repeat itself, “if plans are able to operate in multiple states, it is unclear how state law would be enforced, and which state’s law would take precedence. Insurance commissioners have long opposed the idea of selling insurance products irrespective of borders, or across state lines.”
The intent of the President’s executive order was to increase consumer choice while curbing costs. However, this final rule will invariably reduce patient access to healthcare, weaken the health insurance markets leading to higher healthcare costs for all; higher premiums for those who stay in the marketplace, and high out-of-pocket costs for those who are covered by AHPs for unexpected medical needs.