The Trump administration wants to expand association health plans to offer additional choices for small businesses and their employees, but healthcare industry groups warn that these plans offer weak consumer protections.
The Department of Labor unveiled the plan in early January, and in its proposed rule, employers would have expanded opportunities to join or form AHPs, including provisions that would extend those abilities to sole proprietors. Expanding access to these plans is one of several proposals outlined by President Donald Trump in an executive order issued last year.
However, association health plans as envisioned in the DOL's rule lack consumer protections that could pose a risk of "fraud and insolvency" to potential members, wrote Matthew Eyles, senior executive vice president and chief operating officer for America's Health Insurance Plans, in the group's comments (PDF) on the rule.
Eyles wrote that AHIP supports the overarching goals of the rule—expanding access to insurance and lowering costs—but that relying on AHPs as defined in the proposal is the wrong way to go about it. Plus, expanding access to association health plans could destabilize insurance markets in a way that "runs counter" to the rule's goals, he wrote.
AHIP suggests that DOL eliminate its proposal to expand the definition of employer to include sole proprietors and should establish basic nondiscrimination protections for potential members. And DOL must uphold the role of states in regulating AHPs and other insurance products, according to the letter.
"State regulation and oversight authority is essential to protecting consumers against serious financial harm resulting from fraud and insolvency of association health plans," Eyles wrote.
Other industry groups including the American Hospital Association weighed in on the proposed rule, echoing AHIP's concerns.
The AHA said in a letter (PDF) that the rule "fails to protect against discriminatory insurance practices" and would likely decrease access to affordable coverage as it increases market instability.
"Given these concerns, the AHA recommends that the DOL not finalize this proposed rule and instead work with stakeholders on ways to reduce costs and improve health plan choices for individuals and small businesses," Tom Nickels, the group's executive vice president for government relations and public policy, wrote in the letter.
Though the department does take steps to include consumer protections in the rule, Nickels wrote that the proposal doesn't go far enough in ensuring that association plans don't target only healthy people as potential enrollees.