Association health plans, which have existed for decades, have always been a favorite tool of Republicans.
Announced Tuesday morning by Labor Secretary Alex Acosta, the final rules expanding access to such health plans come eight months after President Donald Trump directed the government to foster alternatives to the ACA's insurance provisions and five months after the Department of Labor proposed a draft version.
The Wall Street Journal reported that the expansion from Oscar, as well as similar plans by Centene Corp. and Molina Healthcare Inc., "reflect that many insurers' ACA business has moved into the black, after years of rate increases that have helped premiums catch up to costs".
The department of labor states that this reform allows small employers a greater ability to gain numerous regulatory advantages enjoyed by large employers.
Prior to the new rule, AHPs were regulated under the ACA in the same way as individual and small groups, meaning they must cover ten essential basic health care needs such as maternity care, prescription drugs, emergency services, mental health services, preventive care (including contraceptives), and hospitalization. It's going to be fantastic. Local insurance agents say they are still getting up to speed on the options that may be available for local customers.
But President Trump has also made promoting less comprehensive health insurance a central part of his campaign to dismantle the Affordable Care Act, often called Obamacare. AHPs will still be required to cover pre-existing conditions, as well as comply with other consumer protections to prevent the scams that have tainted these types of plans in the past.
The insurance company lost $127 million in the three states where it provided coverage previous year, with much of its revenue covering administrative costs, such as spending to improve its technology. According to several recent surveys, health care costs are the biggest obstacle facing small businesses nationwide. The new rule will begin applying to plans over the next year.
Third, it clarifies the existing requirement that bona fide groups or associations sponsoring AHPs must have at least one substantial business goal unrelated to the provision of benefits. And for the first time, individuals will be able to buy one of the plans. Federal oversight under DOL may allow AHP's to be freed from a patchwork of onerous state regulations.
"These new rule changes make it possible for millions of small businesses to now qualify for these plans, potentially extending benefits to millions more American workers", said Decisely CEO Kevin Dunn. While the DOL declined to provide specific definitions or sanction specific industry classifications, the preamble provides some examples of classifications that would not meet the new rule's "commonality of interest" standard.
The Trump Administration is working to finalize a special health insurance option for small firms and self-employed people. "We will sue to safeguard the protections under the Affordable Care Act and ensure that all families and small businesses have access to quality, affordable health care".
The administration also is working to expand a second form of insurance that also sidesteps ACA rules. "To the plumber in Memphis, the songwriter in Nashville, or the bakery owner in Chattanooga, who have been paying through the nose since Obamacare took effect, who might be making $60,000 dollars per year and paying $20,000 for health insurance and who is very likely not receiving a subsidy, the Trump Administration appears to have found a potential solution".