By Paige Winfield Cunningham
A crop of new health insurance plans enabled under regulations from the Trump administration appears more consumer-friendly and less like “junk” insurance than Democrats originally charged.
Chambers of commerce and trade associations have launched more than two dozen of these “association health plans” in 13 states in the seven months since the Labor Department finalized new rules making it easier for small businesses to band together to buy health coverage in the same way large employers do. And there are initial signs the plans are offering generous benefits and premiums lower than can be found in the Obamacare marketplaces.
President Trump billed the new rules as one of several ways to provide consumers with cheaper coverage options than they could find in the Obamacare marketplaces, prompting complaints by Democrats that he was undermining consumer protections laid out in the Affordable Care Act. There’s indeed plenty of evidence the administration is trying to weaken the ACA, including the Justice Department’s refusal to defend it in court.
But when it comes to these new association health plans, they appear — at least so far — to offer benefits comparable to most workplace plans and haven’t tried to discriminate against patients with preexisting conditions, according to an analysis released today by Kev Coleman, a former analyst at the insurance information website HealthPocket.
“We’re not seeing skinny plans,” said Coleman, who founded a website last year with information on association health plans. “We’re seeing the regular doctor care, we’re seeing emergency room care, we’re seeing mental health coverage.”
The farm cooperative Land O’Lakes, which is expanding its association plan to farmers in Nebraska and Minnesota, has said its premiums will cost 25 percent to 35 percent less than plans sold on Nebraska’s ACA marketplace. Every category of essential health benefits — which are required for marketplace plans — is covered, according to an analysis by Modern Healthcare.
Several business associations in Nevada have started offering association health plans to member companies. Enrollees in the plan offered by the Reno-Sparks Chamber of Commerce have cited lower deductibles and out-of-pocket costs.
Two of Michigan’s largest business associations are partnering to offer members association plans managed by BlueCross BlueShield of Michigan, some of which will cover essential health benefits and offer different premium and deductible levels.
According to Coleman, who analyzed 28 association health plans operating under the new rules, a majority of the new association plans are being launched by regional chambers of commerce, four out of five are being managed by a third-party insurance company, and half the plans offer tax-free savings account options.
The idea behind expanding association health plans was to make more widely available the type of coverage often offered to employees of big companies. Small businesses have typically struggled to provide affordable coverage for workers, given the small size of their risk pools.
The new regulations allow small businesses, associations and self-employed individuals — including those operating in different industries – to band together to buy health coverage by pooling all of their employees together. The health consulting firm Avalere has estimated 3.2 million people could eventually be covered by such plans, which have to comply with the same rules governing large employer plans.
The association plans don’t have to cover the essential health benefits required of plans purchased by individuals in the ACA marketplaces — something Democrats have been quick to note. Analysts have also warned that they’ll cause marketplace premiums to increase by as much as 3.5 percent, by drawing healthy people away from Obamacare plans and into association coverage.
But what’s sometimes been lost in heated, politicized exchanges is that the Labor Department did ban these plans from discriminating against patients with preexisting conditions. That perhaps reflects a growing realization among Republicans that opposing these popular protections is a political loser.
Democrats’ claims that association plans constitute “junk” insurance aren’t necessarily true. That’s because the plans are subject to the same requirements currently in place for large employer plans, including requirements to fully cover preventive care and bans on limiting annual and lifetime benefits.
Republicans strove to highlight association health plans in a contentious Capitol Hill hearing Tuesday. Ways and Means Democrats spent their time bashing GOP lawmakers for trying so long and hard to knock down the ACA and its protections for people with preexisting conditions.
For their single witness, Republicans brought in Rob Robertson, chief administrator of the Nebraska Farm Bureau Federation. The organization for farmers and ranchers is offering an association health plan it says will cost 25 percent less than plans currently offered in the state’s individual market and will cover a broad range of benefits including prescription drugs, emergency room visits and prenatal and maternity care.
The plan won’t discriminate against people with preexisting conditions, Robertson said. That’s now a point of emphasis for Republicans, who spent last year’s midterm elections on the defensive as Democrats accused them of abandoning people with serious medical conditions and drawing attention to a GOP-led state lawsuit against the ACA that could dismantle those protections.
“I say to my colleagues on the other side of the aisle, take ‘yes’ for an answer,” Rep. Tom Reed (R-N.Y.) said. “We agree with you. This reform is good; this reform will stay as the law of the land.”
But even if association health plans ultimately prove successful — and it’s too early to say for sure — Republicans face a harsh reality on health-care policy. After years of slamming the ACA but failing to come up with a viable alternative, they’re now stuck in a defensive posture as energized Democrats leveraged the issue to their favor in 2018 and seek to do the same in 2020.
“They get that preexisting conditions must be protected,” Rep. Tom Suozzi (D-N.Y.) said sarcastically in remarks aimed at his colleagues on the other end of the dais. “They hear the message — it only took years; it only took hundreds of millions of dollars of campaign commercials.”