Keep this in mind when reporting on association health plans

By Joseph Burns

One of the best ways to gauge the potential effect of a proposed rule is to review the comments that stakeholders submit to government regulators. For his report on how association health plans might work, Noam N. Levey, who covers health care policy for the Los Angeles Times, reviewed almost all comments that health care groups submitted to the federal Department of Labor (DOL) after it proposed new rules governing association health plans (AHPs).

“A Los Angeles Times analysis of official comments filed with federal agencies found that more than 95 percent — 266 of 279 — of the health care groups that filed comments about the proposed association health plan regulation expressed serious concern or opposed it,” he wrote.

Levey’s analysis of these comments is important because it offers a window into the concerns of health insurers and the other organizations impacted by AHPs. What health insurers and others say about these plans contradicts the positive comments that Labor Secretary Alex Acosta and President Trump have made about the plans.

“AHPs are about more choice, more access and more coverage,” Acosta said. “The president’s decision helps working Americans — and their families — purchase quality, affordable health coverage.”

Trump falsely claimed during his rallies that millions of individuals were signing up for AHPs — even though this latest AHP’s iteration wasn’t available for sign-up until Sept. 1 for coverage that begins Jan. 1, as Adam Cancryn reported for Politico. Jeffrey Young also covered this story this story for The Huffington Post.

For many years, trade associations and other business groups have favored AHPs because they allow small businesses to pool together to get lower rates from health insurers, Levey wrote.

The rules issued this summer do offer some protections for small businesses and the self-employed, Levey noted. For example, the regulation prohibits AHPs from denying coverage to sick consumers or charging more to those individuals who have preexisting conditions.

But AHPs don’t need to meet Affordable Care Act requirements that health plans sold directly to consumers must offer a basic set of protections — essential health benefits — which include coverage for prescription drugs, maternity care and services for mental health and substance abuse.

When insurers do not need to provide minimum benefits, consumers who buy AHPs could end up with inadequate health insurance coverage, Levey wrote, so they got sick these plans may not cover the increased health care services.

Some states are likely to require health insurers to continue to offer certain minimum health benefits but other states may not, Levey said, thus allowing plans with fewer benefits to proliferate. For states without minimum coverage requirements, the insurance market would become more segmented since healthy individuals would choose the less expensive AHPs while those who are sick would choose more expensive comprehensive coverage health plans.

Michelle Andrews covered this angle for Kaiser Health News, writing that AHPs are likely to drive up costs in the regular individual and small-group markets where people needing better coverage would be forced to seek comprehensive insurance.

The American Academy of Actuaries in an issue brief last year warning that AHPs could make it more difficult for individuals or groups with high health care costs to obtain coverage. AHPs need clearly defined solvency requirements and should be subject to state consumer protection laws, the group advised.

Among other concerns, insurance regulators say AHPs have a history of fraud and instability in part because they often are unable to cover the complex health needs of many sick insured individuals. When they are unable to pay for sick policyholders’ care, these companies collapse, Levey explained.

“These insolvencies, whether through malice or incompetence, resulted in significant unpaid claims and the loss of health insurance for participants,” the National Association of Insurance Commissioners said in comments submitted about the proposed AHP rules.

For these reasons, Levey reported, virtually every leading patient advocacy organization opposed the proposed AHP rules, including the American Lung Association, American Heart Association., Cystic Fibrosis Foundation, March of Dimes, National Multiple Sclerosis Society and AARP.

Another concern about AHPs comes from groups that backed the idea initially when the Trump Administration took office last year. Adam Cancryn wrote in Politico that the National Federation of Independent Business, an important supporter of the administration’s AHPs, found the new rules to be unworkable, noting that the group had abandoned the idea of establishing a national AHP for its members. Other groups, such as the National Retail Federation, is unlikely to form a national AHP, and the National Association of Realtors, downplayed the idea of starting such a plan any time soon, Cancryn added.

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