A key
small business group says Trump’s new insurance rules are unworkable, after
pushing the idea for nearly 20 years.
07/19/2018 05:06 AM
EDT
Updated 07/19/2018 03:21 PM EDT
President Donald
Trump handed an influential business advocacy group what should have been a
historic lobbying victory when he recently rolled out new rules encouraging
small businesses to band together to offer health insurance.
Trump, who’s touted
the expansion of so-called association health plans as a key plank in his
strategy to tear down Obamacare, even announced the rules at the 75th
anniversary party of the National Federation of Independent Business last
month, claiming the group’s members will save “massive amounts of money” and have
better care if they join forces to offer coverage to workers.
But the NFIB, which
vigorously promoted association health plans for two decades, now says it won’t
set one up, describing the new Trump rules as unworkable. And the NFIB isn’t
the only one: Several of the nationwide trade groups that cheered Trump’s new
insurance rules told POLITICO they’re still trying to figure out how to take
advantage of them and whether the effort is even worth it.
That could signal
there’s minimal early interest in an initiative the administration says will
help lower health care costs — and one that Trump himself has prematurely
hailed as a wild success. Trump falsely claimed during rallies in recent weeks
that “millions” are signing up, though the new health plans can’t be sold until
Sept. 1.
Behind the scenes,
the NFIB had already been souring on the idea before Trump’s announcement,
concluding that establishing an association health plan would be too complex
and not worth the effort. The NFIB, which offered only a vague endorsement of
the Trump effort last month, now says it’s abandoned any idea of setting up a
national plan for its hundreds of thousands of members.
“We can’t set up an
AHP under the new rules any more than [we] could under the old rules,”
spokesman Adam Temple said.
The NFIB, which
typically supports Republican policies, argues that the Trump
administration’s sweeping regulations don’t
go far enough, failing to eliminate key roadblocks that would prevent diverse
organizations like it from creating a nationwide association health plan.
Other trade groups
have raised similar concerns. The National Retail Federation said it‘s unlikely
to form a national plan due to the “structure of the rule“ and is focusing
instead on whether it can help state-level retail groups create their own
plans. The National Association of Realtors, which had long lobbied for
expanding association health plans, said it’s working with health insurance
experts and providers to understand the new rules, but downplayed the idea of
starting one anytime soon.
“The development of
an AHP will be a long process, and at this time we do not have a definitive
timeline,” said Wesley Shaw of the Realtors group.
Even in some red
states, state regulators have voiced skepticism and taken steps to limit
association health plans, pointing to their history of lax regulation and fraud
before Obamacare set more stringent insurance standards. And further clouding
the future of Trump’s big health care idea is the threat of legal challenges
from blue states, which also fear the new policy will siphon healthy customers
from the Obamacare insurance markets.
The Labor Department,
which issued the new rules, did not respond to a request for comment.
The NFIB has
specifically blamed restrictions under the new rules that allow businesses to
band together to purchase health coverage only if they share an industry or are
located in the same state. That’s a disqualifying factor for the NFIB, whose
membership spans hundreds of thousands of small businesses across varying
industries.
“You can’t set up an
industry-specific association just because you’re a small employer or just
because you’re a small employer who believes in business,” said Chris
Condeluci, a benefits lawyer and former GOP staffer on the Senate Finance
Committee. “You have to have some kind of nexus.”
The NFIB could still
choose to set up association health plans in each state and meet the new rule’s
geographic requirements — an idea the group said it’s still exploring.
But interest in the
association health plan concept among the group’s leadership waned well before
the Trump administration’s expansion, said several people familiar with the
NFIB’s high-level discussions who requested anonymity to freely discuss the
group’s thinking.
“They’ve essentially
abandoned a core health care initiative that was a cornerstone lobbying effort
for two decades,” said one person familiar with the NFIB’s inner workings.
That change was
driven largely by NFIB CEO Juanita Duggan, three people close to the trade
group said. Duggan, who took over in 2016, quickly narrowed the group’s policy
priorities, focusing much of its firepower on shaping Republicans’ successful
bid to enact sweeping tax cuts.
Duggan has
consistently questioned the idea of setting up an association health plan,
arguing it would be too costly and generate too little benefit for the NFIB,
according to three people familiar with the high-level internal discussions.
She also questioned whether operating such a health plan would fit with the
advocacy group‘s core mission, one person said.
That opposition
alarmed some within the NFIB who worry that failing to set up an association
health plan risks angering the NFIB’s members and sparking a defection to
competing trade groups offering the coverage. The NFIB’s membership has
consistently ranked health care costs as its top issue, according to multiple
sources familiar with the organization’s internal polling.
The NFIB’s membership
has fallen in recent years to roughly 300,000, down from about 350,000 in 2014
and nearly 600,000 during George W. Bush’s presidency. Some NFIB board members
and staffers have argued the group could reverse the membership decline by
offering an association health plan, a person familiar with the internal
discussions said.
“It’s very
competitive out there,” said one person familiar with the NFIB’s inner
workings. “What are we going to continue to draw people in with?”
In an email, Temple
of the NFIB disputed any suggestion the group is not forming an association
health plan because of Duggan’s opposition. Rather, he said the
administration’s narrow new rules for national trade groups effectively killed
any possibility of NFIB establishing a national plan.
Still, the NFIB’s
refusal to set up an association health plan marks a major turning point for a
group that spent nearly 20 years aggressively lobbying on the issue.
In the early 2000s,
it steered a coalition of more than 80 business groups pushing legislative
efforts aimed at letting small businesses purchase health insurance from trade
associations.
“AHPs will allow
small business owners to band together across state lines through their
membership in bona fide trade associations, like NFIB, to purchase health
coverage for their families and employees,” the NFIB wrote in a 2003 report
that ranked association health plans as a top priority.
The NFIB later
unsuccessfully pressed Democrats to include association plan language in
Obamacare during the law’s drafting. The group ultimately emerged as one of
Obamacare’s staunchest opponents, leading a challenge to the law that the
Supreme Court rejected in 2012.
The organization
still advocates repealing and replacing the health care law with a more
free-market system that relaxes regulatory constraints on small businesses.
But those close to
the NFIB said the organization’s lukewarm official response to the Trump
administration’s new association health plan rules spoke volumes about its
flagging interest in the idea it long championed.
“That’s a far cry
from the full-court press,” said one person close to the group. “NFIB mobilizes
when it wants to.”
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