Amid 'Sky High' Interest, Association Plans Face Obstacles

by Judy Packer-Tursman

Six months after the Trump administration issued final regulations to expand association health plans as an alternative to coverage through Affordable Care Act (ACA) exchanges, AHP sponsorship is slowly moving forward. A national AHP coalition, launched in August, has grown to a diverse array of 22 members of large and small trade associations, including the American Farm Bureau Federation and National Restaurant Association.

Attorney Christopher Condeluci, principal of CC Law & Policy in Washington, D.C., is running the Coalition to Protect and Promote Association Health Plans. He describes interest in AHPs as "sky high," though he concedes "take-up has been relatively modest." He ascribes this partly to some states, given flexibility under the federal regulations, prohibiting carriers from underwriting fully insured large group plans.

Nationwide, Condeluci estimates there are eight or so "anti-AHP" states, including Connecticut, Massachusetts, New York, Oregon and Pennsylvania.

He dismisses critics' concerns that consumers could end up with skimpy coverage through AHPs, which are exempt from many ACA rules even though they cannot discriminate based on health status.

"We are not like short-term limited duration plans [also promoted by the Trump administration], because we must comply with coverage requirements, and are voluntarily providing essential health benefits," Condeluci says. "And the reason is, these organizations are membership driven. They're not able to offer skimpy coverage or skinny plans to their members. If they did, their members would leave, and they wouldn't attract new members."

"In theory, if there were an individual market where the premiums were more competitive than the AHP, then there would be no AHP," Condeluci adds. "If coverage is more affordable and just as comprehensive, then people will go with that." For this reason, he asserts that everyone will be attracted to AHPs to the same extent, and the market segmentation feared by critics — in which only healthy individuals shift to AHPs and sicker people stay on exchanges — won't occur, especially among subsidized exchange plan enrollees.

"That doesn't surprise me, that associations are offering benefits consistent with the small-group market," says Kevin Lucia, a research professor at Georgetown University Health Policy Institute's Center on Health Insurance Reforms. "It's how they rate their members." 

From Health Plan Weekly