UPDATED June 20, 2018 at 10:05
a.m. ET
June 19, 2018
UPDATE: June 20, 2018: This story has been
updated to add information on a New York and Massachusetts lawsuit.
Dive
Brief:
- The Department of Labor Tuesday finalized its plan to
expand the role Association Health Plans play in the
healthcare landscape, clearing the way for cheaper plans to be offered by
small employers in a regional area or for a particular industry
nationwide.
- DOL senior officials told
reporters that the final rule contains anti-discrimination protections
that align with rules for large employers and preserves individual state
authority to regulate AHPs, steps that America’s Health Insurance Plans
praised. But AHIP, other industry groups and lawmakers raised concerns
that the rule may lead to increased premiums for those who depend on the
individual or small group market, resulting in fewer insured and an
increase in fraudulent actors.
- New York Attorney General Barbara
Underwood and Massachusetts Attorney General Maura Healey announced
Wednesday that they believe the final rule is unlawful and will lead to
fewer consumer protections. "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 two
said in a statement.
Dive
Insight:
Administration
officials said the rule would help small business employees gain more
affordable health coverage, while Democrats and some other skeptics worried it
could lead to a proliferation of junk plans and disrupt the risk pool.
“The
rule released today levels the playing field between small and large employers
by providing new opportunities for small employers to band together to gain the
same health insurance options as large employers,” CMS Administrator
Seema Verma said in a statement.
Senate
Finance Committee Ranking Member Ron Wyden, D-Ore., blasted it as bad policy.
“The
Trump Administration is opening the floodgates for junk plans that will make it
harder for people with pre-existing conditions to find affordable coverage and
easier for scam artists to make a quick buck at the expense of American
families,” Wyden said. “Association health plans will send premiums for real,
comprehensive health insurance even higher and leave an unstable insurance
market in its wake.”
DOL
Secretary Alexander Acosta pointed on a call with reporters to a Congressional
Budget Office report that estimated that 4 million additional Americans will
enroll in AHPs “within a few years,” including 400,000 that are currently
uninsured.
Senior
officials also argued that people “are going to be protected against
pre-existing conditions just as they are in the large group market, as well as
age and gender” under the final rule. "The same rules that apply in the
large group market are going to be applied for AHPs under the rule," an
official told reporters.
An
analyst note from Jefferies agreed the final rule contains those protections
but noted that AHPs can reduce benefits below the Affordable Care Act’s 10
essential categories. “The lower benefits would facilitate lower premium prices
for price sensitive buyers, but might not deliver better ‘value,’” the note
said.
But
Karen Pollitz, senior fellow for health reform and private insurance at the
Kaiser Family Foundation, told Healthcare Dive that the final rule as written
contains inadequate protections, pointing to the wellness program provision as
one backdoor to potential health status discrimination. A Democratic staffer
echoed the concerns, telling Healthcare Dive it is not clear that the rule
prevents discrimination based on age and gender.
AHIP
praised the protections in the final rule but warned that those who depend on
the individual or small group market may be left with higher costs.
The
American Hospital Association raised concern that the expansion would reduce
costs for healthy individuals at the expense of those who continue to rely on
the health insurance marketplaces.
“We
are particularly disappointed that the U.S. Department of Labor preempts states
from fully regulating these plans, preventing states from ensuring appropriate
consumer protections are in place,” AHA EVP Tom Nickels said in a statement.
California
insurance Commissioner Dave Jones agreed that the final rule allows for
continued state regulation of Multiple Employer Welfare Arrangements, but said
the rule threatens the existence of more comprehensive health insurance plans.
The
National Association of Manufacturers also lauded the final rule, saying that
the expansion of AHPs could offer the potential for improved care and lower
costs.
“AHPs
offer an important market-based pathway to expanded health care coverage and
lower health care costs, and now is the time to make this option more widely
available to smaller companies and their employees,” said Robyn Boerstling, NAM
VP of infrastructure, innovation and human resources policy, in a
statement.
Still,
some critics have warned that the proposed rule would have unintended
consequences. A diverse set of stakeholders including advocacy groups,
hospitals and insurers commented that the proposal would increase the risk of
fraud and insolvency for consumers, increase fragmentation of risk pools and
fail to protect against discriminatory practices.
Alliance
of Community Health Plans President and CEO Ceci Connolly told Healthcare Dive she
remains concerned with the final rule’s impact on the stability of the
individual market, on top of other pressures put on the insurance market:
namely, the Republican repeal of the individual mandate penalty and the ending
of cost-sharing subsidies. She also raised concern that AHPs don’t have to
cover the full range of essential health benefits required by the ACA.
“There’s
been a history of fraudulent behavior in these plans,” Connolly said. “What
happens to the risk pool when you come up with multiple ways to siphon off the
healthiest members of a risk pool?”
The
finalization comes nearly a year after President Donald Trump issued an executive order
directing the government to consider expanding AHPs,
short-term, limited-duration insurance and health reimbursement
arrangements.
https://www.healthcaredive.com/news/trump-admin-finalizes-association-health-plan-expansion/526068/
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