Association Health Plans Expanded, Drawing Criticism

The Department of Labor last week released a final rule that allows for the expansion of Association Health Plans (AHPs), a move that MHA and other healthcare interests in the state had opposed strongly earlier this year, and one that Massachusetts Attorney General Maura Healey says is illegal and will lead to her filing suit against the Trump Administration.

The final rule expands the definition of “employer” in the AHP regulations, making it easier for employers to band together even if they are not in the same industry but merely operate in a common geographic area. By forming AHPs the employers can bypass Affordable Care Act rules relating to essential health benefits, pre-existing condition protection, and regulations concerning premium ratings and co-payment limits.

In March, MHA joined the Mass. Medical Society, Health Care for All, the Mass. Association of Health Plans, and Blue Cross Blue Shield of Mass. in a letter urging the Department of Labor to reject the proposed rule change.

The hospital, physician, insurer, and consumer groups wrote: “If this rule is finalized in its current form, it is likely that small businesses with younger, healthier risk will move to establish AHPs, while groups employing individuals with older and sicker workers will remain in our merged market. The proposed expansion of the definition of employer to include working owners would also incentivize individuals, who would normally purchase coverage in the merged market, to migrate to AHPs, leaving the merged market concentrated with unhealthy risk. As the better risk moves out of the merged market and into AHPs, premium rates for those businesses that remain will increase, making it more difficult for employers and individuals to maintain coverage.”

The Trump Administration claimed the changes would provide more choice to consumers. Opponents of the president’s clearly stated pledge to dismantle “Obamacare,” said greater choice comes with fewer consumer protections.  In joining New York’s Attorney General Barbara Underwood in announcing a lawsuit, AG Healey said the AHP expansions “will invite fraud, mismanagement, and deception – and, as we’ve made clear, will do nothing to help ease the real healthcare challenges facing Americans. We believe the rule, as proposed, is unlawful and would lead to fewer critical consumer health protections.”  Congressman Richard Neal (D-Mass.) slammed the AHP rule, saying, “These garbage association health plans provide inadequate coverage, threatening the health and economic security of America’s families. As people buy into these shoddy plans, insurance costs rise across the board for everyone else.”