The options for individual and small business health insurance increased in the early days of the Affordable Care Act as health insurance companies fought to snap up new customers. However, as time went on, those options dwindled when carriers realized not enough healthy people applied for policies, many choosing to pay the penalty for not having coverage rather than the premium associated with having it. Rates increased as choices dwindled.
Further complicating the issue was President Trump’s pledges to repeal the ACA or defund it. While neither one happened, the requirement to have coverage was removed causing even more companies to withdraw from offering coverage which resulted in premiums further increasing. As June came to an end, President Trump signed an executive order paving the way for a new health insurance option that provides an intriguing alternative to the coverage offered through the ACA.
Trump’s executive order allows associations to offer health insurance plans to their members for the first time in many years. Association Health Plans will be able to offer individual members and small business owners health insurance through their associations at a lower cost than individual and family plans currently offered on the exchanges, or available to business owners through conventional providers. One reason for the lower cost is the pool of applicants could be significantly larger than even in a small to medium sized business, depending on how many members participate.
A possible second reason for the lower cost is they may not contain some coverage mandated for an ACA policy such as maternity care, prescription drugs, mental health services, and other care. The question that remains to be answered is what level of coverage will be available to members interested in these plans and will there be options to add the essential coverage to these plans? Once these plans are released, it will be important to determine if they offer the level of care required by association members.
Proponents of ACA plans have at least 3 concerns about the association health plans:
- If they offer less coverage, will the patient be left financially high and dry when they need care?
- Will they funnel healthy members away from ACA plans putting the participating carriers in a precarious financial position?
- What will the impact be on ACA health plan costs?
It’s too early to tell if the association plans will provide excellent coverage at an attractive savings, or if they’ll simply be weak offerings. In addition, no one knows what their impact will be on the ACA. To be sure, health insurance is changing again and may even undergo more changes depending on who’s elected president in 2020.
For now, I believe if association plans provide good coverage at an affordable rate, individuals and small business owners will have access to even more health insurance options signaling that competition can drive innovation and that’s a good thing. What do you think? Share your comments, questions, and concerns with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!