In a move that sounds reasonable, but will continue the catastrophic cutbacks to healthcare access, the Department of Labor released a new rule this week governing Association Health Plans, or AHPs. Small business can band together, allowing them to easily form groups based on geography or industry with self-employed individuals eligible to join.
“Many of our laws, particularly Obamacare, make healthcare coverage more expensive for small businesses than large companies,” said Labor Secretary Alexander Acosta. “AHPs are about more choice, more access, and more coverage.”
The labor secretary is accurate except for the choice, access and coverage parts. If he had just said premiums will be lower, that would have been more accurate. But what does a consumer get? It seems it will be the expanded version of catastrophic insurance.
The AHP plans will not be forced to cover “essential health benefits” like mental health care, emergency services, maternity and newborn care or prescription drugs. It will also draw healthy people out of the Affordable Care Act marketplace, driving up costs for those who stay because they need more coverage, which will increase premiums, co-pays and deductibles.
The double digit premium increases over the past few years, along with growing co-pays and deductibles have already essentially rendered millions who have insurance unable to use their insurance. The new rule change will only worsen that trend. According to Covered California, statewide average premium increases in 2019, absent federal policies to stabilize these markets, could range from 15.6 to 30.2 percent.
The newest rule is projected to lead to 3.2 million enrollees shifting out of Obamacare’s individual and small group markets into AHPs by 2022, according to a recent analysis by Avalere Health. The rule would increase premiums for those remaining in the individual ACA market by 3.5%. The Society of Actuaries projected that customers dropping out of the exchanges will be 60 to 70 percent healthier than those who remain.
This action is the latest death by a thousand rule changes the Trump administration and its Republican allies have taken since they were unable to kill the ACA outright. This has included proposing rules for short-term plans, lifting mandates protecting people with pre-existing conditions and will soon include changing and curtailing premium subsidies.
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