Association health plans will create far more health care competition and choice

 

Last week, the Department of Labor issued a rule change that makes it possible for small businesses and associations to offer more affordable health care plans, known as association health plans.

As my colleague Justin Haskins wrote in the Washington Examiner, the rule change will be a boon to "small business owners and their employees, as well as sole proprietors" because they are allowed to band together and purchase group plans.

Haskins points out four ways the new rule will benefit small business-owners and sole proprietors:

First, the larger the group purchasing insurance, the more negotiating power it has with insurance companies, allowing consumers to buy plans at significantly lower rates than they otherwise would be able to in the individual marketplace.  Second, group health insurance plans do not have to comply with many federal health insurance regulations that drive up the cost of insurance.  Third, because group plans often include hundreds or even thousands of people, costs are spread out more easily among those in the group.  Fourth, group health insurance plans can be purchased across state lines, allowing the purchaser many more options when shopping for the best plan.

President Donald Trump has continuously supported expanding access to association health plans, a policy reform he recently told the New York Times will help millions of people.

"[People] that were formerly in Obamacare or didn't have insurance.  Or didn't have health care.  Millions of people," Trump told the Times.  "That's going to be a big bill, you watch.  It could be as high as 50 percent of the people.  You watch.  So that's a big thing."

As usual, the media's rushed and disproportionate response to the rule change demonstrates that they fail to understand the desire of the American people when it comes to their health care.  For example, Vox drew the following conclusion about the recent rule change and the future landscape of health care: "The president is surely overstating the impact of his executive order, which hasn't actually changed anything yet.  But policy experts warn that together, these changes could represent a serious threat to Obamacare."

Well, yes, Vox, a "serious threat to Obamacare" is exactly the point!

Although Congress failed to repeal and replace Obamacare in 2017, that doesn't mean that Trump has abandoned his promise to help Americans gain access to more affordable health insurance.  The Trump administration has permitted several workarounds to increase coverage in lieu of joining the increasingly expensive individual market, and spokesmen for the administration have said on multiple occasions that new federal health care legislation would be welcomed.  For example, Andrew Bremberg, who oversees domestic policy at the White House, stated, "The president still firmly believes that Congress must act to repeal and replace Obamacare, but before that can be done, this administration must act to provide relief."

Outside the White House – and almost outside government entirely – a new effort to draft federal health care legislation by prominent think-tanks and grassroots organizations has been quietly gaining steam.  This effort, spearheaded by former senator Rick Santorum, would convert Obamacare's funding into block grants for states.

Many are skeptical that Santorum's plan will be successful.  Senate Republicans have a narrower advantage than they did in 2017, when Senate leadership failed to convince GOP Sens. John McCain (Ariz.), Lisa Murkowski (Alaska), and Susan Collins (Maine) to vote for repeal.  And some conservative Republican senators, such as Sen. Rand Paul (Ky.), are already panning the block grant idea because they argue that it does not go far enough and keeps too much of Obamacare in place.

While Congress continues to struggle to make good on the Republicans' promise to end Obamacare, the Trump administration has shown repeatedly that it is committed to improving the health insurance industry on its own.  Hopefully, Trump's passion to replace Obamacare with a much more effective framework will soon inspire others on Capitol Hill to permanently and completely undo the damage inflicted by the Affordable Care Act.

Sarah Lee (Slee@heartland.org) is a health care research fellow for The Heartland Institute.

Image courtesy of Flickr.

 

Last week, the Department of Labor issued a rule change that makes it possible for small businesses and associations to offer more affordable health care plans, known as association health plans.

As my colleague Justin Haskins wrote in the Washington Examiner, the rule change will be a boon to "small business owners and their employees, as well as sole proprietors" because they are allowed to band together and purchase group plans.

Haskins points out four ways the new rule will benefit small business-owners and sole proprietors:

First, the larger the group purchasing insurance, the more negotiating power it has with insurance companies, allowing consumers to buy plans at significantly lower rates than they otherwise would be able to in the individual marketplace.  Second, group health insurance plans do not have to comply with many federal health insurance regulations that drive up the cost of insurance.  Third, because group plans often include hundreds or even thousands of people, costs are spread out more easily among those in the group.  Fourth, group health insurance plans can be purchased across state lines, allowing the purchaser many more options when shopping for the best plan.

President Donald Trump has continuously supported expanding access to association health plans, a policy reform he recently told the New York Times will help millions of people.

"[People] that were formerly in Obamacare or didn't have insurance.  Or didn't have health care.  Millions of people," Trump told the Times.  "That's going to be a big bill, you watch.  It could be as high as 50 percent of the people.  You watch.  So that's a big thing."

As usual, the media's rushed and disproportionate response to the rule change demonstrates that they fail to understand the desire of the American people when it comes to their health care.  For example, Vox drew the following conclusion about the recent rule change and the future landscape of health care: "The president is surely overstating the impact of his executive order, which hasn't actually changed anything yet.  But policy experts warn that together, these changes could represent a serious threat to Obamacare."

Well, yes, Vox, a "serious threat to Obamacare" is exactly the point!

Although Congress failed to repeal and replace Obamacare in 2017, that doesn't mean that Trump has abandoned his promise to help Americans gain access to more affordable health insurance.  The Trump administration has permitted several workarounds to increase coverage in lieu of joining the increasingly expensive individual market, and spokesmen for the administration have said on multiple occasions that new federal health care legislation would be welcomed.  For example, Andrew Bremberg, who oversees domestic policy at the White House, stated, "The president still firmly believes that Congress must act to repeal and replace Obamacare, but before that can be done, this administration must act to provide relief."

Outside the White House – and almost outside government entirely – a new effort to draft federal health care legislation by prominent think-tanks and grassroots organizations has been quietly gaining steam.  This effort, spearheaded by former senator Rick Santorum, would convert Obamacare's funding into block grants for states.

Many are skeptical that Santorum's plan will be successful.  Senate Republicans have a narrower advantage than they did in 2017, when Senate leadership failed to convince GOP Sens. John McCain (Ariz.), Lisa Murkowski (Alaska), and Susan Collins (Maine) to vote for repeal.  And some conservative Republican senators, such as Sen. Rand Paul (Ky.), are already panning the block grant idea because they argue that it does not go far enough and keeps too much of Obamacare in place.

While Congress continues to struggle to make good on the Republicans' promise to end Obamacare, the Trump administration has shown repeatedly that it is committed to improving the health insurance industry on its own.  Hopefully, Trump's passion to replace Obamacare with a much more effective framework will soon inspire others on Capitol Hill to permanently and completely undo the damage inflicted by the Affordable Care Act.

Sarah Lee (Slee@heartland.org) is a health care research fellow for The Heartland Institute.

Image courtesy of Flickr.