Association Health Plans Would Be Another Hit to Struggling Insurers
Carver also questions how much the cherry-picking of healthier individuals will affect the market. Any merging of individuals into a larger group for insurance coverage should serve the purpose of spreading risk, he says.
"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 that improve by putting small groups together into a single larger group is not new," he says. "Some states allow for this type of pooling under group rating programs for disability and workers' compensation benefits."
He agrees, however, that allowing the plans to not cover essential benefits could be a setback to efforts at improving transparency and consumerism, Carvery says.
"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," Carver says. "Members will need to consider if the plan benefits them based upon preexisting conditions."
Families USA, a consumer healthcare advocacy group, goes so far as to say that the rule change would make it easier for insurers to sell "junk insurance." Senior Fellow Stan Dorn says in a recent blog post that the change "lets insurance companies sell junk plans to millions of Americans currently receiving comprehensive insurance in individual and small-group markets. The proposed rule lets AHPs sell coverage that is exempt from most state oversight and many of the ACA's most important consumer protections."
Dorn points out that the premiums for an AHP will be determined by the health of only a relatively small number of people.
"If an AHP's enrollees are unusually healthy, that AHP's premiums are low," he writes. "By contrast, the ACA carefully structures individual and small-group markets so premiums reflect the average risk level of the entire market, rather than the cost of enrollees in a particular plan. This helps keep premiums more reasonable for everyone."
The move was endorsed by the American Trucking Associations (ATA), a 50-state federation of associations representing the trucking industry. The group called the proposed rule change "a step in the right direction for improving access to affordable, quality healthcare." The trucking industry is primarily comprised of small-businesses, the ATA notes, with more than 90% of registered motor carriers operating fewer than six trucks. That means it is uniquely positioned to benefit from the establishment of AHP, the group says.