Earlier this month, the Department of Labor (DoL) released a proposed rule that allows small business and employee groups to purchase association health plans (AHPs) instead of employee-sponsored or individual health insurance plans. This recent proposal was met with mixed views across the healthcare industry – some believing this would further complicate the insurance market or weaken consumer protections.
Our very own Bruce Carver, associate vice president of payer services at MedeAnalytics, offered his insight on the potential impact this proposal can have on the insurance market. His thoughts on benefits, risk and coverage are below.
What are the primary changes this rule would allow?
The Trump administration has proposed a new rule, based on an executive order by President Trump, that allows Association Health Plans (AHP’s) to expand the types of groups that can form an AHP. The two primary changes in the rule would allow AHP’s to be offered membership without regard to state lines, and allow self-employed individuals to take part in a large-group AHP.
What does this mean for essential benefits?
This proposal could allow insurers to sell plans that do not cover certain essential health benefits, like mental health, substance abuse treatment, maternity care and prescription drugs. This may cause a lot of confusion with members when they are treated by providers and any limitations in coverage will need to be clearly communicated between members and providers, in an already confusing market. Members will also need to consider if the plan benefits them based upon pre-existing conditions.
What about risk?
Any time you increase the number of people covered in a plan, you have the capability to diversify risk. The concept of “pooling” members in a region for covered benefits by putting small groups together into a single larger group is not new. Some states allow for this type of “pooling” under group rating programs for disability and workers’ compensation benefits.
How will this impact network coverage?
As member coverage crosses state lines, regional health plans will need to consider if they have appropriate network coverage to meet access requirements. This may also increase competition in some markets that have few options. However, this may also have the potential to drive down costs.
What have been industry reactions around the plan?
There is a lot of initial criticism that health plans will “cherry pick” healthier members, leaving the sicker members in the traditional Obamacare plans. This has yet to be proven to be the case. At the end of the day, health risk is just that…risk. “Pooling” a lot of members into a single plan that has a balance of healthy and sicker individuals may improve costs vs. the current options offered today.
Looking for more details on AHPs? Bruce also shared his commentary in a recent article by Health Leaders Media. If you’re looking for a partner to help your organization manage the shifting healthcare landscape, contact us here.