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Published On: Wed, Jun 20th, 2018

Free market health care: Association Health Plan Reform implemented

The Department of Labor finalized its rule expanding access to Association Health Plans (AHPs) this week, a reform that will help millions of working Americans gain access to quality, affordable health insurance for themselves and their families.

stethoscope photo courtesy of powertoolsplanet.com

Many small businesses and their employees have struggled with government restrictions that limit access to quality, affordable health coverage. This Association Health Plan (AHP) reform will address many of the inequities between small and large businesses in access to that coverage.

Many small business owners cannot afford to offer health insurance to their employees. The percentage of small businesses offering healthcare coverage has been dropping substantially. For the self-employed, the individual market exchanges do not offer affordable coverage either; premiums more than doubled between 2013 and 2017 with deductibles increasing even more.

This reform allows small employers – many of whom are facing much higher premiums and fewer coverage options as a result of Obamacare – a greater ability to join together and gain many of the regulatory advantages enjoyed by large employers.

Under the Department’s new rule, AHPs can serve employers in a city, county, state, or a multi-state metropolitan area, or a particular industry nationwide. Sole proprietors as well as their families will be permitted to join such plans. In addition to providing more choice, the new rule makes insurance more affordable for small businesses. Just like plans for large employers, these plans will be customizable to tailor benefit design to small businesses’ needs. These plans will also be able to reduce administrative costs and strengthen negotiating power with providers from larger risk pools and greater economies of scale.

“President Donald J. Trump is expanding affordable health coverage options for America’s small businesses and their employees. Many of our laws, particularly Obamacare, make healthcare coverage more expensive for small businesses than large companies,” said U.S. Secretary of Labor Alexander Acosta. “AHPs are about more choice, more access, and more coverage. The President’s decision helps working Americans – and their families – purchase quality, affordable health coverage.”

The rule includes several safeguards. Consumer protections and healthcare anti-discrimination protections that apply to large businesses will also apply to AHPs organized under this rule. As it has for large company plans since 1974, the Department’s Employee Benefits Security Administration will monitor these new plans to ensure compliance with the law and protect consumers. Additionally, States will continue to share enforcement authority with the Federal Government.

Kentucky Senator Rand Paul, who worked directly with President Trump and administration officials to achieve the change said, “For months, I worked directly with President Donald Trump and Secretary Acosta to make this happen. Today, we are putting more power back into the hands of the American people to choose the health insurance plan that best meets their needs at a price they can afford. I refused to believe we could not keep fighting for pro-patient, pro-worker, and pro-family solutions in health care, and I applaud President Trump for responding and delivering one of the most significant free market health care reforms in a generation.”

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