Association health plans went under the microscope during a congressional hearing on protections for patients with pre-existing conditions on Tuesday.
The Trump administration expanded the use of such plans last summer as part of its ongoing efforts to provide coverage alternatives for people who cannot afford insurance on the Affordable Care Act’s exchanges.
However, critics have warned that these policies can lack consumer protections and could disrupt the ACA’s markets. Twelve state attorneys general have filed suit against the expansion, saying that AHPs are at high risk for fraud and can allow for coverage discriminations.
Rob Robertson, chief administrator and secretary-treasurer for the Nebraska Farm Bureau Federation, testified (PDF) at a House Ways and Means Committee hearing Tuesday that his group views its AHP as a “companion” to the ACA exchanges and not a replacement for it, and that its 700 members joined because the cost of exchange plans was out of reach.
The farm bureau’s plans cost about $25,000 annually, and savings can be significant for the farm and ranch families who participate. A member of the bureau’s board of directors did not enroll in an ACA plan because it was too costly but saved between $7,000 and $8,000 by joining the AHP.
“Outside of simply saving money on their premiums, we can also point to numerous examples of enrollees who previously went without health insurance, now entering the health insurance marketplace because of our more affordable plans,” Robertson said.
Ways & Means is the first committee in the #116thCongress to hold a hearing on defending pre-existing conditions – this is a serious issue and it demands serious attention. @HouseDemocrats will continue to stand arm-in-arm to protect your care. pic.twitter.com/MhYZMMVEWM— Ways & Means Committee (@WaysMeansCmte) January 29, 2019
However, Rep. Mike Thompson, D-Calif., noted that the farm bureau’s AHP is ACA-compliant, so it covers the law’s essential health benefits—which is not required of such plans.
“That’s an important factor, because if it weren’t for that it could very easily be another ‘junk policy’ that takes your members’ premiums and they’re there for you every step of the way unless you become injured or you become ill,” Thompson said.
Other panelists at the hearing expressed similar concerns. Keysha Brooks-Coley, vice president for federal advocacy and strategic alliances at the American Cancer Society Cancer Action Network, said in her testimony (PDF) that the administration’s rule expanding association plans also allows them to bake in higher coinsurance and deductibles.
This can be especially problematic for enrollees who are diagnosed with cancer, a disease that is costly to treat, Brooks-Coley said.
She also said increased access to such plans can lead to unbalanced risk pools in the ACA markets, as cheaper plans attract healthier people.
“The adverse selection spiral generated by those non-AHPs could lead other plans in the individual and small group markets to charge increasingly higher premiums, making them unsustainable,” Brooks-Coley said.
A video of the full hearing can be found below: