Health Care

Association Health Plans: How Do You Solve a Problem Like a MEWA?

Association Health Plans: How Do You Solve a Problem Like a MEWA?”

The Trump administrationtook the final step Tuesday in its plan aimed at making health insurance policies cheaper for some small businesses. Up to 4.3 million people are projected to leave the individual and small group insurance markets to enroll in association health plans (see Association Health Plans Could Spark 4.3 Million People To Drop ACA Coverage).

Association health plans, which have existed for decades, have always been a favorite tool of Republicans.

However, the new Trump administration rule allows small businesses and self-employed people to bind together exclusively for the purposes of buying health insurance and be regulated as a large group plan not subject to the ACA's minimum coverage requirements.

While AHPs have found support among a number of trade associations, including the National Retail Federation, many health advocate groups, such as the American Cancer Society, oppose them. They are the most recent piece in the administration's jigsaw efforts to undercut elements of the ACA through its own powers after the Republican-led Congress failed previous year to repeal a broad swath of the sprawling 2010 statute.

Top Republicans cheered the move as a pathway to escape soaring Obamacare premiums. That would free them from having to adhere to some of Obamacare's rules, particularly the one requiring insurers to offer comprehensive coverage. While there are many elements to the new rules, one key issue is that health plans will not be required to cover the Patient Protection & Affordable Care Act-mandated (PPACA) essential health benefits, which includes ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and addiction treatment services, prescription drugs, rehabilitative and habilitative services, laboratory services, preventive and wellness services and chronic disease management, and pediatric services.

Those hefty coverage rules have been blamed for hiking prices of health plans across the board, forcing customers to pay for services they don't want.

Obamacare's defenders said consumers might not understand what kind of coverage they are getting and that sicker consumers who rely on robust coverage will face higher premiums because insurers will expect those who remain in the exchanges to file expensive claims.

Catherine Monson can't wait to set up an association health plans that her franchisees can offer their workers.

"The Trump administration hopes to level the playing field between large companies and small businesses by expanding access to association health plans", Labor Secretary Alexander Acosta told reporters on Tuesday.

But the plans will have more freedom to charge different prices depending on customer's age, gender and location - something ACA coverage can not do. 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 Department of Labor finalized its rule expanding access to Association Health Plans (AHPs) this week, a reform that will help millions of working Americans gain access to quality, affordable health insurance for themselves and their families. "Ultimately, the rule could result in fewer insured Americans and may put consumers at greater risk of fraudulent actors entering this market".

The final rule also clarifies that the association must have at least one substantial business goal unrelated to providing health coverage.

Avalere Health, a Washington-based consulting firm, estimated last winter that the rules would lead to lower premiums by 2022 for those with association health plans - averaging $2,900 a year less than in the ACA marketplace for small businesses and $9,700 less compared with the individual market.



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