The Department of Labor on Friday filed notice that it will appeal a ruling by a federal judge that struck down a Trump administration rule letting individuals and small businesses pool together to buy health insurance.
The decision on March 28 by U.S. District Judge John Bates, an appointee of former President George W. Bush, threatens a program the Trump administration created for customers to use as an escape hatch from high Obamacare premiums.
The administration will be appealing in the U.S. Court of Appeals for the District of Columbia.
The notice filed by the Department of Labor did not say whether the Trump administration is asking for a stay on the decision, meaning that people may be left in the lurch regarding their health insurance coverage. Bates in his opinion asked the Department of Labor to state whether any part of the rule could still stand.
In his ruling, Bates concluded that the Trump administration’s rules were “clearly an end-run around” Obamacare and agreed with the 11 states and District of Columbia that had challenged the rules, saying they also violated the Employee Retirement Income Security Act, or ERISA.
The health insurance alternatives are known “association health plans,” and they let people who are self-employed or who are in small businesses act as a large business for the purpose of buying medical coverage.
Obamacare had ended the plans to encourage more people to go into its exchanges and also because past plans had become insolvent, leaving people holding the bag for costly medical expenses.
But the Trump administration had tried to reinstate them through rulemaking, and they are already up and running in many states: Health insurers have been allowed to run the plans since September 2018, and association-created coverage was only allowed beginning in January 2019. New associations that form were supposed to kick off in April.
At least one state — Vermont — has asked for the plans to be halted entirely as the case is litigated. States are otherwise allowed to put their own restrictions on association health plans.
Association health plans have been covering the same benefits that Obamacare plans do, even though they are not obligated to, according to analyses by the industry publication Modern Healthcare and another by AssociationHealthPlans.com.
But critics have warned that it is too early to conclude these benefits would remain. Unlike Obamacare, the plans are allowed to charge people more based on their health status, and prices could increase for next year.People who have pre-existing conditions, such as cancer or diabetes, can be asked to pay higher premiums that lead them to be priced out of the plans entirely.