Will Association Health Plans Be a New Alternative?
Healthcare might experience an expansion in access to affordable health insurance, according to the Department of Labor (DOL). On the 4th of January, the DOL proposed a rule to expand the opportunity to offer employment-based health insurance to small businesses through Small Business Health Plans, also known as Association Health Plans (AHP). As the alternative to the ACA, AHP allow’s small business owners to come together and purchase health insurance for employees. Many of the original ACA mandates are exempted for AHP’s and could be a solution to cheaper health insurance.
Association Health Plan
So what is the actual difference between AHP and the ACA? With the ACA, your 10 essential benefits are covered, which includes drugs, ambulatory, mental health, emergency care, and more services. With so many different areas covered by this insurance, it makes it a lot more expensive than other plans. When President Trumped signed his executive order last October, AHP plans were able to receive looser restrictions to create more insurance competition and drive down premiums. With the elimination of the individual mandate, more people are signing up for these alternative plans to get cheaper health coverage.
Negatives with Association Health Plans
Though AHP plans are cheaper, it is worthy to note that the coverage is not as full as the ACA. This could be a negative for older workers, who are sick and need specific coverage. The problem that arises with AHP is that regulations would allow rates based on age, gender, and industry work. AHP’s would not be able to turn away individuals or charge higher premiums based on someones standing health. The exemptions in AHP from state regulation will cause market instability in the traditional group market while offering more options.
From the looks of it, AHP could be a means to a cheaper health care plan, but will not give you the same coverage. With more information on the President’s plan, it would be a good idea to sit down with your insurance agent and talk about your options. Stay tuned for the update on Association Health plans and how it can affect you. For more information, check out AHIP.org.