The Trump administration is proposing to let small firms act more like big corporations to buy cheaper health insurance, a measure that would get around some of Obamacare’s requirements.
The rule would broaden the availability of less-regulated health insurance coverage to more small employers, and to self-employed people. The rule does so by letting many more small firms band together under “association health plans,” or AHPs. Those plans would be exempt from many of the Affordable Care Act’s rules on what benefits have to be covered.
The regulation will “expand employer and employee access to more affordable, high-quality coverage,” the Labor Department said in the proposed rule, which has to go through the federal rule-making process and could still be changed.
Critics said they worry that the health plans created under the rule would attract healthy people who don’t need expensive plans, leaving Obamacare’s markets for the sick and expensive.
Other Obamacare rules do apply though, including caps on how much an individual has to pay out of pocket in a year, and bans on lifetime or annual limits for services that are covered by the plan. All plans are also required to cover a list of preventive services with no out-of-pocket costs to the beneficiary.
Nor will they be able to charge different rates to people based on how healthy or sick they are, something opponents of the change had feared.
The proposal sets out two main cases under which small firms could band together to buy insurance, effectively acting like a bigger company. Firms in the same geographic area could do so, as could companies engaged in the same type of business. The administration estimated that as many as 11 million people who work for small businesses would take advantage of the plans.
Sen. Rand Paul, a Kentucky Republican, has long advocated for association health plans, and praised the proposal. “Conservative health-care reform is alive and well, and I will keep working with President Trump to build on this progress,” he said.