The Trump administration is proposing to let small firms actmore like big corporations to buy cheaper health insurance, ameasure that would get around some of Obamacare's requirements.

The rule would broaden the availability of less-regulated healthinsurance coverage to more small employers, and to self-employedpeople. The rule does so by letting many more small firms bandtogether under “association health plans,” or AHPs. Those planswould be exempt from many of the Affordable Care Act's rules onwhat benefits have to be covered.

The regulation will “expand employer and employee access to moreaffordable, high-quality coverage,” the Labor Department said inthe proposed rule, which has to go through the federal rule-makingprocess and could still be changed.

It's the latest step by President Donald Trump's administrationto do away with parts of the Affordable Care Act without a fullrepeal of the law, which Republicans in Congress have been unableto do. In October, Trump signed an executive order as part of aWhite House push to undermine the Affordable Care Act and open upnew options to consumers.

Critics said they worry that the health plans created under therule would have slimmer packages of benefits at lower prices thanACA plans, drawing away healthier customers from Obamacare'smarkets and leaving the sick and expensive.

The association plans, like the health coverage currentlyoffered by big employers, wouldn't be subject to Obamacare'srequirement that plans cover 10 types of essential benefits, suchas hospitalizations, drugs and maternity care.

“This rule seems to err on the side of making AHPs broadlyavailable without making any effort to embed the protections thatpeople get from ACA-covered plans,” said Sharon Block, a formersenior Obama administration Labor Department official who now runsthe Labor and Worklife Program at Harvard Law School. “You'removing people towards less-quality plans and potentially doing harmto the people who stay in the ACA-covered plans.”

Other Obamacare rules do apply though, including caps on howmuch an individual has to pay out of pocket in a year, and bans onlifetime or annual limits for services that are covered by theplan. All plans are also required to cover a list of preventiveservices with no out-of-pocket costs to the beneficiary.

Nor will they be able to charge different rates to people basedon how healthy or sick they are, something opponents of the changehad feared.

“That's a big deal, and would mitigate the extent to which theseplans destabilize the current insurance market,” Larry Levitt,senior vice president for health reform at the Kaiser FamilyFoundation, a health research group, said on Twitter. “But I haveno doubt they would find clever ways of cherry picking healthierpeople implicitly — e.g., based on what benefits they cover.”

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Banding Together

The proposal sets out two main cases under which small firmscould band together to buy insurance, effectively acting like abigger company. Firms in the same geographic area could do so, ascould companies engaged in the same type of business. Theadministration estimated that as many as 11 million people who workfor small businesses would take advantage of the plans.

Sen. Rand Paul, a Kentucky Republican, has long advocated forassociation health plans, and praised the proposal.

“Conservative health-care reform is alive and well, and I willkeep working with President Trump to build on this progress,” hesaid in a statement.

From: Bloomberg News

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