House Holds Hearing on AHPs

The House Education and Workforce HELP Subcommittee held a hearing on Tuesday in response to the Trump Administration’s proposed rule on Association Health Plans. That rule would redefine “employer” under ERISA to allow more groups to qualify as associations, and allow for coverage to not be subject to the ACA’s essential health benefits. NAHU submitted detailed comments on this proposal earlier this month. The hearing focused on the role of AHPs and whether they can be helpful for small businesses and their employees, as well as issues over discrimination, adverse selection, market stability, state regulation, and their role in reducing the overall cost of health insurance.

The hearing included testimony from a real estate firm, a large franchise corporation, health policy advisor Christopher Condeluci, and the advocacy group Small Business Majority. With the exception of Small Business Majority, the witnesses generally expressed support of AHPs, noting that they provide comprehensive coverage, don’t discriminate based on health conditions, and don’t impose annual or lifetime limits. They particularly expressed support for AHPs on the basis that that they are helpful for national trade associations, franchisees, and companies with ‘cooperative’ members.

However, John Arensmeyer, representing Small Business Majority, testified that AHPs would result in an unstable market, unbalanced risk pool, increased premiums, and less comprehensive coverage. He noted that AHPs simply move the cost around so that different people pay different rates. He contended that they would result in separate risk pools for some employers, leading to an imbalanced risk pool and increasing the premiums for the remaining small businesses. He also expressed concern over anti-discrimination protections, as the proposed rule doesn’t require coverage for EHBs, which would lead to less comprehensive coverage.

Among the committee members, Republicans argued that the AHPs would lead to reduced costs and expanded choices, particularly among individuals and small businesses who have been hit hard by ACA regulated plans. Democrats argued that the proposal was an attempt to sabotage access to affordable healthcare coverage, saying that it would lead to increased costs for everyone who remains in the marketplaces without providing any substantive protection for people with expensive medical conditions.

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