Association Health Plans ‘A Move In The Right Direction’

Commentary

REPUBLICANS have been attacked as do-nothings on health care, largely because they failed to repeal and replace the Affordable Care Act. Yet actions quietly taken by the Trump administration appear to be creating significant benefit for millions.

In October 2017, President Trump signed an executive order making it easier for small employers to band together to provide insurance to employees via association health plans. This year marks the first time strengthened AHPs have been offered, and the early signs are encouraging.

Proponents said AHPs would lower insurance costs. Democrats derided the plans as "junk" coverage because AHPs aren't subject to all federal mandates imposed on policies offered through Obamacare exchanges.

Yet the AHP offered by the Greater Oklahoma City Chamber, available to businesses with two to 50 employees, includes a "wide selection of flexible plans to choose from, including medical, dental and vision ..." The medical plans include several options with a range of deductibles and copays. The State Chamber is offering similar AHP benefits to small businesses.

Critics complain AHPs may not cover those with pre-existing conditions. But the nine plan choices offered through the Las Vegas Metro Chamber of Commerce's AHP include people with pre-existing conditions and lock in premium rates for two years. Land O'Lakes has launched an AHP to serve farmers in its network in Minnesota and Nebraska; that plan includes coverage for those with pre-existing conditions as well as the 10 "essential" health benefits mandated for policies sold through Obamacare exchanges.

That said, the population of those with pre-existing conditions who lack insurance has been wildly inflated by some activists and that problem is minor. When the Affordable Care Act was approved, it included a transitional high-risk pool to cover anyone with pre-existing conditions who lacked insurance. Just 115,000 of 300 million people nationwide ever accessed that pool.

For most, the appeal of AHPs is they allow small-business owners and their employees to access affordable health insurance that's unavailable in many instances. Because AHPs pool employees from many businesses, a larger base of policyholders is created, which spreads risk and reduces premiums.

The Congressional Budget Office has estimated up to 4 million people will receive coverage through AHPs by 2023. About 400,000 of those individuals might have otherwise gone without coverage despite the Affordable Care Act. The cost of individual policies on Obamacare exchanges has skyrocketed, and many sole proprietors (such as farmers) earn too much to qualify for federal subsidies to offset those high prices.

Keep in mind, Obamacare exchange policies often involve large deductibles and copays and limited provider networks, another contrast with many new AHPs. That's why it's believed many individuals who previously received subsidies to buy Obamacare policies will now forgo them to instead obtain the more affordable and desirable coverage offered through AHPs.

Rather than having the government force consumers to buy certain policies, AHPs will have to gain business by appealing to customers with price and quality. That's a welcome and overdue move.

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