National Consumers League

NCL statement on Association Health Plans

March 8, 2018

Washington, DC--The National Consumers League is deeply concerned by the Trump Administration’s proposed rule that would broaden the purview of Association Health Plans (AHPs) and significantly alter the way in which they are regulated. This directive is another step towards the dismantling of the Affordable Care Act (ACA) under the guise of promoting “consumer choice,” and counteracts efforts to realizing a health system in which every American has access to quality, affordable health care.

Association Health Plans allow affiliated small businesses and employer trade associations to band together to sell low-cost plans to the individuals they represent. The proposed rule expands the definition of “employer,” which will allow businesses, associations, and self-employed individuals -- regardless of affiliation -- to join together for the sole purpose of offering health insurance.

While AHPs are less expensive, these savings are achieved through eliminating vital consumer protections and offering significantly less coverage. Under the proposed rule, AHPs will not have to adhere to the same standards as ACA-compliant plans, including the provision of essential health benefits that guarantee coverage of items and services such as mental health treatment, maternity and newborn care, and prescription drugs. They would also be exempt from cost-sharing rules that cap out-of-pocket spending on deductibles, copays, and coinsurance. Unfortunately, many consumers who buy these plans for their low premiums often do not realize until their healthcare needs change that they have purchased a plan that will not cover certain services. Consumers may be forced to forgo necessary care because of a prohibitive price tag or be left with astronomical debt due to the cost of uncovered services.  

Moreover, bolstering AHPs as a suitable alternative to ACA-compliant plans undermines and destabilizes the individual marketplace through heightening adverse selection. AHPs would likely attract younger and healthier individuals, exacerbating the risk pool, and leaving older, sicker individuals who need more robust care vulnerable to skyrocketing premiums and insufficient plan choice. The proposed rule also allows AHPs to establish rates or preclude coverage of certain services based on health status, work industry, age, or gender, which unduly places a broad range of consumers at risk for higher out-of-pocket costs.  

Prior to regulations established by the ACA, AHPs were historically wrought with fraud and predatory practices that left consumers with a litany of pervasive negative financial and health outcomes. The National Consumers League worries that the Trump Administration’s proposed rule would once again expand the pathway for AHPs to operate in a manner that puts consumer protection on the backburner and affordable health care out of reach for so many among us.  We remain committed to ensuring every American has meaningful health coverage and will continue to work with our colleagues to explore ways we can expand access to care without compromising quality.  

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About the National Consumers League
The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit http://www.nclnet.org.