The Trump
administration is continuing its assault on the Affordable Care Act, this time
by making it easier for employers to join forces to create health plans that
don't have to provide many of the comprehensive benefits required under the
ACA.
Under a new rule
released by the U.S. Department of Labor Tuesday, many of these
"association health plans" will not have to offer what the ACA called
"essential health benefits," including coverage for hospitalization,
maternal care, prescription drugs, mental health and addiction treatment, and
pediatric services.
Without those
benefits, the administration says, the plans will be able to offer premiums far
cheaper than plans now sold on the individual and small-group markets. Health
plans in the large-group market, those covering more than 50 employees, are not
required to cover the benefits. The new rule eliminates some restrictions that
made it hard for the plans to become large enough to be classified in the
large-group market.
The rule will also
allow the plans to be sold across state lines, which some state regulators say
would undermine their ability to provide oversight. That is a concern to many
regulators because of the fraud and insolvencies the plans were notorious for
before the ACA.
Critics warn that
the plans will be able to attract a younger, healthier demographic, leaving
older and sicker people to pay higher premiums in the individual and small-business
insurance markets.
Some state
insurance regulators who objected to the proposed rule warned that it could
cripple the health insurance markets in their states. Numerous consumer and
professional medical organizations, as well as disease advocacy groups, also
were opposed.
Even insurers
opposed the rule. "We remain concerned that broadly expanding the use of
[association health plans] may lead to higher premiums for consumers who depend
on the individual or small group market for their coverage," America's
Health Insurance Plans, the lobbying arm of the insurance industry, said in
reaction to the new rule's release. "Ultimately, the rule could result in
fewer insured Americans and may put consumers at greater risk of fraudulent
actors entering this market."
Labor Secretary
Alexander Acosta did not deny that the new rule would drain people away from
the individual market. He said as many as 4 million people will gain coverage
under the new plan offerings in the next few years.
That's not far off
from estimates from Avalere, a health research and consulting company, which
predicted that the new rule would draw 3.2 million enrollees out of the
individual and small-group markets by 2022. Avalere also projected that
premiums in the individual market would increase by 3.5 percent.
But Acosta touted
the rule as offering many consumers a cheaper alternative. "This expansion
will offer millions of Americans more affordable coverage options."
The rule represents
one of several actions the administration and congressional Republicans have
taken to undermine the ACA. GOP tax legislation last year removed the
requirement that all Americans obtain health insurance, a key component of the
ACA.
Earlier this month,
the Justice Department asked a federal court to throw out requirements that
insurance carriers accept patients with pre-existing conditions.
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