Americans are a step closer to gaining access to affordable, quality healthcare options thanks to a new regulatory measure from the Trump Administration.
Freelancers, small businesses, and associations can soon band together to sell and secure coverage – and do so without some of the onerous regulations from the Affordable Care Act (ACA). This is a welcomed step and win for Americans looking for coverage they desire and at prices they can afford.
The Trump Administration finalized a rule that enables more employers to form Association Health Plans (AHPs) by city, region, state, or even nationwide. By taking advantage of economies of scale, these employers can reduce the costs of healthcare and diversify risk.
This is a win for freelancers like Lyft drivers and Etsy sellers and sole proprietors (businesses with no other employees). The rule allows these 11 million Americans to band together and secure coverage. Many of them struggle to offer insurance because it's currently too expensive and cumbersome.
A Washington Post headline admits the benefits of this move are clear: The Health 202: The Trump administration will allow people to buy cheaper health plans. But they won't have certain Obamacare benefits.
Association plans have been around for years, but the Trump administration is expanding eligibility as a way to provide cheaper options for people to afford health insurance.
On the surface, the concept of cheaper, leaner health insurance sounds great — if you’re a young, healthy person, you could buy an association plan with narrower benefits for a smaller price tag. That’s because these plans aren’t required to cover the range of health services required under the ACA.
The Wall Street Journal editorial board clears up some of the likely misinformation that opponents will spout:
The headlines note that AHPs are exempt from the federal mandate on essential health benefits, with the false implication that this means no one will cover maternity care. But the main savings from association plans come from lower administrative costs and larger risk pools, not skimpy benefits.
Chris Condeluci, a lawyer who worked on the Affordable Care Act in the Senate, has explained that the law exempts the large group market from the benefits mandate because corporate coverage tends to be at least as comprehensive as the mandate and high in actuarial value. He is also right that employers team up in an AHP to “attract and retain talent” and compete with larger firms, which requires that plans be generous.
Here's the real concern that ACA supporters have about expanding options for affordable, quality care:
The real panic on the left is that many Americans may leave the ObamaCare exchanges for plans they prefer in price, quality or both. In other words, people might get better coverage.
The Congressional Budget Office says new AHPs will attract four million Americans, about 400,000 of whom are uninsured, and that means more affordable and better coverage for people who might not otherwise have it. For once the test of a health-care policy will depend less on government dictates than on the choices of millions of Americans.
The Affordable Care Act was endeavored to solve the challenges of a lack of affordable, quality coverage that too many Americans faced. Instead of greater competition, many were left were fewer options for the care they need at higher premiums and out-of-pocket costs. Taxpayers were on the hook for an expansion of government in healthcare.
Slowly, this healthcare bill is being unwound and it's for the better. If 3.2 – 4 million people leave the ACA for AHPs it will be because Americans know a good deal when they see it.