PNHP

John Arensmeyer on association health plans

John Arensmeyer on association health plans

Association Health Plans Will Destabilize Small Group Market

By John Arensmeyer, Small Business Majority Founder & CEO
Small Business Majority, June 19, 2018

We are disappointed and disturbed that the U.S. Department of Labor released a final rule today authorizing the expansion of association health plans (AHPs) over the objections of virtually everyone who weighed in on the proposed rule, including small businesses. This is yet more evidence that this administration will do all it can to undermine the Affordable Care Act (ACA) regardless of the consequences. The new rule will allow groups of businesses to band together to buy insurance across state lines, which will be bad for small firms and their employees because it will lead to higher premiums, unbalanced risk pools and lower-quality insurance.

While the new rule may make it easier for a select number of small businesses with younger and/or healthier employees to purchase association health plans that might be cheaper in other states, the tradeoff is that this will cause the insurance market for small businesses to split in two, leading to major spikes in premiums for small firms that remain in the small group market.

What’s more, these multi-state plans will offer fewer consumer safeguards. In fact, they will not have to include protections for people with pre-existing conditions nor will they be required to cover things like maternity care because they will not be subject to certain rules established by the ACA.

The AHP rule is also redundant because small businesses are already allowed to work together to purchase health insurance. That system is called the small group market, and the more people we have in this pool, the lower premiums will be for its participants. Encouraging people to leave the small group market, however, will only harm small businesses by raising their premiums.

This administration has shown that it will do anything and everything possible to destroy policies it disagrees with, regardless of whether or not those policies are working for small businesses. It is simply fact that the ACA has helped millions of small business owners, their employees and solo entrepreneurs gain quality, affordable health insurance. Since the administration has no interest in improving healthcare for small firms, we implore states to do all they can to strengthen ACA marketplaces so that insurance remains affordable for America’s job creators.

http://www.smallbusinessmajority.org…

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Comment:

By Don McCanne, M.D.

John Arensmeyer is one of the most credible voices in the small business community. We should listen to him when he discusses the association health plans (AHPs) that are now being advanced by the Trump administration, supposedly to benefit small business owners.

The need is for affordable access to essential health care for the owners and employees of small businesses. AHPs may make the insurance product more affordable, but they will make health care access less affordable because of gaps in benefits and excessive out-of-pocket cost sharing, not to mention possible inability to obtain coverage because of preexisting conditions. The current problems with excessive cost sharing and impaired access due to narrow provider networks will only be made worse with these inadequate association health plans.

The small group market was previously in disarray and thus was one of the primary motivating forces behind the enactment of the Affordable Care Act. As healthier individuals leave the small group market to purchase cheaper association health plans, the small groups will experience adverse selection, driving premiums further up to even less affordable levels.

Arensmeyer provides us with one more reason to replace the current Congress and administration since the current people in charge seem to remain unresponsive to the nation’s needs.

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Is achieving single payer ‘unrealistic’?

Some say the goal of establishing a single-payer system in the U.S. is “unrealistic” or “politically infeasible.” While it’s true that single-payer health reform faces formidable opposition – especially from the private insurance industry, Big Pharma, and other for-profit interests in health care, along with their allies in government – there is no reason why a well-informed and organized public, including the medical profession, cannot prevail over these vested interests.

We should not sell the American people short. At earlier points in U.S. history, the abolition of slavery and the attainment of women’s suffrage were considered unrealistic, and yet the movements to achieve these goals were ultimately victorious.

On a practical level, our existing Medicare program – one that doctors, hospitals and other providers are very familiar with – provides a readymade framework for building a universal, single-payer system. This existing infrastructure will help smooth the transition.

What is truly “unrealistic” is believing that we can provide universal and affordable health care, and control costs, in a system dominated by private insurers and Big Pharma.

What about adding a ‘public option’ or ‘Medicare buy-in’ to the ACA?

A government-sponsored “public option” in the ACA’s marketplaces will not fix the health care system for two reasons.

First, a public option would leave today’s multiple payers in place, merely adding one more payer to our already fragmented system. It would thereby forgo at least four-fifths of the administrative savings available through a single payer. It would do nothing to streamline the administrative tasks (and costs) of hospitals, physician offices, and nursing homes, which would still contend with multiple payers and hence still need the complex cost-tracking and billing apparatus that drives up administrative costs.

Second, a quarter-century of experience with public/private competition in the Medicare program (traditional Medicare vs. private Medicare Advantage plans) demonstrates that the private insurers will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry-picked healthier seniors and have exploited regional health spending differences to their advantage.

Thus, under the ACA, relying as it does on the participation of large, for-profit insurers, a public option would not lean toward single payer, but toward the segregation of patients, with profitable ones in private plans and the unprofitable ones concentrated in the public plan, dooming the latter to failure.

As for a “Medicare buy-in” that would lower the age of eligibility for Medicare to 55, for example, such a buy-in would only work if enrollment were mandatory. Otherwise it would become the place where all the sickest patients get dumped. That might be OK for the sick enrollees, since Medicare is better and more secure than private coverage, but it would drive total health care costs (and premiums) up, not down.

Our current “system” is structurally flawed; patching it up is not a real solution.