Trumps New Plan
A new Trump administration proposal issued on Thursday would allow individuals and small groups to band together for health insurance, a move widely seen as an attack on the Affordable Care Act.
If the rule is finalized, which is expected to take until at least mid-2018, these new “association health plans” would be exempt from mandatory benefits stipulated by the ACA, such as pregnancy care, prescription drug coverage and preventative services.
That might translate to people from the same state or area forming such a group, or perhaps one composed of plumbers from all across the country, said Spencer Perlman, director of health-care research at policy analysis firm Veda Partners.
The proposal, put out by the Department of Labor, reads like a sequel to a Trump campaign promise, that he would make it possible to sell health insurance across state lines.
Health experts said then, as now, that such a policy could contribute to a decline in comprehensive health coverage, and make those that remain much more expensive.
The idea is that younger, healthier individuals would flock to cheaper plans that cover fewer things, while older or sicker persons would face higher premiums for fuller coverage.
Health insurers also oppose the change. Industry group America’s Health Insurance Plans said in a Friday statement that “we are concerned that the changes proposed would lead to higher prices and weaker consumer protections in the small group and individual markets, where nearly 40 million Americans get their coverage.”
Read: Trump says health insurance across state lines will make things better — but experts disagree
The policy still has to go through a two-month comment period, meaning it could change or simply never get finalized.
It’s also likely to face legal challenges. The Trump administration’s proposal reinterprets a law called the Employee Retirement Income Security Act, which sets standards for health plans, “in a way it’s never been interpreted before in 45 years,” Perlman said.
Then there’s another, burning question: Will this even work?
Association health plans, which already exist, have never been very popular. There have also been cases of them going bankrupt or being charged with fraud.
According to the Department of Labor, about 44 million people could be eligible for association health plans under the proposal.
Read our earlier coverage: What Trump can do to undermine Obamacare, now that the GOP health bill has failed
Such plans are also expected to be cheaper, because they will cover fewer things, said Larry Levitt, senior vice president of the respected independent Kaiser Family Foundation.
They also won’t be able to charge different prices to members based on health status, under a nondiscrimination provision, but would probably “find clever ways of cherry picking healthier period implicitly — e.g., based on what benefits they cover,” Levitt said.