Experts hated this Trump health-care policy. So far, they’re wrong.
It’s time to acknowledge that critics may have misjudged one of the Trump administration’s signature health-care policies – “bigly.”
Last summer, the administration issued new rules designed to help small businesses and self-employed people get health insurance through what are known as association health plans. The plans, which have existed for decades, allow small businesses in the same field or region to band together into “associations” and provide insurance for their members. Because these plans are able to use their size to negotiate lower premiums and are not subject to all Affordable Care Act regulations, they are often cheaper than those found on the individual market.
Soon after the administration issued its rule, health-care experts piled on with criticism, warning that it would lead to skimpy “junk” plans that do not cover all of the ACA’s essential health benefits, such as care for substance abuse and outpatient prescription drugs. They also feared that the plans would pull healthy patients out of the ACA’s individual exchanges, forcing premiums to go up. One analysis estimated that the administration’s rule could increase marketplace premiums by as much as 3.5 percent.
But new reports suggest that much of that fear might be overblown – at least for the time being. As The Washington Post’s health policy guru Paige Winfield Cunningham laid out this week, more than two dozen association health plans have been developed since the administration issued its new rule, and so far they don’t look nearly as skimpy as experts predicted.
One analysis found that the plans offer benefits similar to those in most employer insurance and they haven’t attempted to circumvent Labor Department regulations forbidding them to discriminate against consumers with pre-existing conditions. Another analysis examining Land O’ Lakes, a farmer-owned cooperative, found that the plan covered all of the ACA’s essential health benefits with substantially lower premiums than on the individual market.
Meanwhile, the Congressional Budget Office released a report Thursday that predicted coverage gains as a result of the new rule, in conjunction with another rule from the administration that makes it easier for consumers to buy short-term health insurance. (Such short-term plans were also, perhaps more legitimately, criticized for offering “junk” plans.) The CBO projects that, as a result of these two rules, an estimated 5 million people will enroll in either a short-term plan or an association health plan every year over the next decade, including more than 1 million people annually who were previously uninsured. The CBO states that most of the movement (around three-quarters) will be due to association health plans.
The CBO acknowledged that these rules will likely raise premiums for other insurance markets by roughly 3 percent. But, in terms of insurance plans on the ACA exchanges, the report also notes that federal subsidies will defray much of those higher costs.
It’s entirely reasonable to be skeptical of Trump’s true intention for expanding association health plans, given his promise to “let Obamacare implode.” Perhaps Trump simply wanted to use his executive power to throw the exchanges into chaos after Congress failed to repeal the ACA last year. But so far, it seems these plans could work exactly as his administration promised: By helping offer coverage options for middle-income families who are making too much to qualify for federal ACA subsidies but are still struggling to afford premiums.
And now that Congress has done away with the ACA’s mandate to buy insurance, it’s difficult to imagine families moving over to association health plans solely to fulfill the mandate at a cheaper cost. Without that mandate, these “skimpier” plans still have to prove to families that their coverage is worthwhile.
None of this means these plans are off the hook. Health policy experts should continue to scrutinize these plans and make sure that they’re providing meaningful coverage and not committing fraud, as they’ve been known to do in the past.
Nor do association health plans absolve the Trump administration of its assault on American health care. Trump still owns the loss of health coverage that accrued over the past year. Whatever the association health plans contribute toward getting Americans coverage must be weighed against the damage done by other changes from the administration, such as allowing states to add work requirements for Medicaid.
But we should give credit where credit is due. The goal is, and always will be, to attain universal coverage. So long as the United States has its hodgepodge of private and public health-care policies, we should at least keep an open mind about how association health plans can help us attain it.