Trump takes aim at Obamacare with insurance marketplaces, praised by Rand Paul
The Trump administration on Thursday proposed new rules to let certain small businesses and trade groups band together to buy health care, in its latest move that could weaken Obamacare’s insurance marketplaces.
The expansion of so-called association health plans is part of a broader effort to encourage the rise of cheaper coverage options that are exempt from certain Obamacare patient protections and benefit rules.
photo Andrew Aliferis via Flickr
The proposed rules stem from an executive order President Donald Trump signed in October directing federal agencies to loosen restrictions on short-term health insurance and association health plans, in a bid to create more insurance competition and drive down premiums. The administration’s move was praised by many business groups and conservative lawmakers, including Sen. Rand Paul (R-Ky.), who has long advocated for an expansion of such plans.
“Conservative health care reform is alive and well, and I will keep working with President Trump to build on this progress,” Paul said in a statement.
“The Trump administration has declared open season for fraudsters selling junk insurance while those with pre-existing conditions will find health care further and further out of reach,” said Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee.
The association plans, however, aren’t exempt from the popular Obamacare provision banning insurers from charging people more or denying coverage based on a pre-existing condition.
A Washington Post op-ed explains the predicament: “While associations could not overtly discriminate against people with preexisting conditions, there are covert ways in which they could do so. For example, one would expect insurance companies to welcome an association of fitness instructors, but not so much an association of volunteer firefighters. And there is no prohibition against redlining, so association plans could avoid entire communities with high health needs.”
They continue: “The expansion of these association health plans threatens to create a parallel insurance market that offers fewer consumer protections than the ACA-regulated market for individuals and small businesses. This parallel market is likely to attract healthier people, leaving the ACA market with a sicker pool of enrollees and higher premiums.”
The new Labor Department rules come shortly after Congress eliminated the individual mandate in its tax overhaul a move that will likely result in fewer people signing up for insurance — particularly the young and healthy. The rules specify that self-employed individuals, who can now purchase individual coverage through the Obamacare markets, would be able to join association plans. That, along with a looming Trump administration proposal to expand the availability of short-term insurance plans, could further erode enrollment in Obamacare’s insurance marketplaces.
“Any one of those steps in isolation wouldn’t necessarily destabilize the markets, but the combination of all these actions is likely to make insurers very nervous,” said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation. “The ultimate risk is that more insurers decide that the market is too risky and they exit, leaving counties with no options at all.”
photo Will O’Neill via Flickr
