No one is calling it a game-changer yet, but the proposed Labor Department rule issued Thursday allowing "association health plans" has the opportunity to expand health coverage options for 11 million uninsured Americans.
The rule's entry on the Federal Register now opens a 60-day public comment period, so officials said the potential implementation is unlikely to come until summer. But the measure of competition they offer and the ability for plans to be sold across state lines are already exciting those who believe more choice in the health insurance industry is important.
Essentially, they allow small businesses and self-employed individuals to band together - even across state lines - to create a larger, combined pool of employees, potentially lowering health insurance costs for all employees. However, the businesses must have a commonality, which could be based on region or industry. Retail or restaurant associations would be two examples.
"The main objective of this effort is to expand choices for people who do not yet have insurance and [create] more options for employers and employees to take advantage of," Robert Moffit, a senior fellow in health policy studies at The Heritage Foundation and a former assistant secretary at the Department of Health and Human Services, told The Daily Signal.
The Labor Department rule is based on an October executive order by President Donald Trump, which Sen. Rand Paul, R-Ky., an opponent of previous plans suggested by the administration, called "the biggest free-market reform of health care in a generation." The executive order, simply, allows people to buy plans that circumvent some of the Affordable Care Act (ACA) mandates.
Its potential for helping Americans also can be measured by those who opposed it - supporters of the failing ACA.
ACA backers don't like the choice association health plans offer because they are likely to further weaken the existing state exchanges. They believe some participants are likely to leave the already crumbling state exchanges for the new plans, leaving fewer on the plans and driving up costs - which have seen double-digit premium increases each year since their inception - to those left.
The hand-wringers also worry that participants in the new plans won't have as comprehensive the coverage that the ACA offers, but that's precisely the point. Many males, for instance, would rather pay less for their insurance than for maternity care they're never going to need.
States will be able to regulate the plans but will not be able to deny people coverage or charge them more for a pre-existing illness.
We hope once implemented the association health plans find a home for many of the 11 million uninsured who are eligible for them and that they are just the beginning of more conservative, market-based health care reforms that allow Americans to buy the health care coverage they want, not what they're forced to buy.