Critical Consumer Protections Missing, Potentially Impacting Affordability of Other Plans
On June 19, the Employee Benefits Security Administration of the U.S. Department of Labor (DOL) announced a final rule on Association Health Plans (AHPs), finalizing the DOL’s proposed rule released on January 5, 2018. AHPs allow groups of small business to band together and purchase health care plans for their employees. The rule exempts these association plans from some of the requirements of the ACA. It allows plans to be sold that do not provide a minimal level of health care services so they may be cheaper and attract healthier people. This in turn could make the ACA compliant plans more expensive if they have more people who require health care services in their risk pools. This rule will undermine the Affordable Care Act (ACA) and the critical consumer protections the ACA provided to people with disabilities and chronic health conditions.
Before the ACA became law, it was extremely difficult for people with pre-existing conditions to purchase affordable and comprehensive health insurance in the individual and small group market. Finalizing this rule and other actions by the Administration signal a return to unaffordable and skimpy health insurance and a corresponding increase in the cost of ACA compliant health plans. The following are specific concerns with the AHP final rule:
- Incomplete Coverage of Essential Health Benefits (EHBs) – These plans would not be subject to the ACA’s requirement to cover all ten categories of EHBs. They could exclude coverage for mental health, substance abuse services, and rehabilitative and habilitative services and devices and other essential health benefits. People with disabilities and chronic health conditions rely on these basic health care services to maintain their health and function.
- Purchasing Confusion – Unlike other plans, AHPs are not required to adhere to the ACA’s consumer protections. This causes confusion among Americans about which types of plans will cover the services they need. Consumers could unknowingly purchase plans that could leave them underinsured if they become ill or need medical care.
- Higher Premiums Based on Age and Gender – AHPs cannot charge higher premiums based on health status, but they do allow AHPs to base premiums on age and gender. This means women and older workers could end up saddled with higher out-of-pocket costs.
- Undermined Risk Pool – AHPs are likely to attract younger, healthier workers away from the individual and small group marketplaces. This skewing of the risk pool will force these marketplace plans to raise premiums on comprehensive plans, increasing costs for people with disabilities and older Americans. It will leave AHP enrollees with bare bones benefit packages that are more likely to fail to meet their needs when needed most.
- History and Risk of Fraud – AHPs have a history of fraudulent operation in which unauthorized health insurance companies fail to comply with regulation, collect premiums for nonexistent insurance, fail to pay claims, and leave patients with hefty medical bills. AHPs expanded under the final rule could cause a new wave of fraud, leaving people with disabilities vulnerable to ending up uninsured.
The Arc will continue to analyze the impact of health care rulemaking on people with disabilities and chronic health conditions and respond to changes that negatively impact people with disabilities.