AHPs Need a Closer Look

October 18, 2017

Last week, President Donald Trump signed an Executive Order (EO) on health insurance, including language similar to past iterations of Association Health Plans (AHPs).  Although health care costs continue to be among the top challenges facing America’s small businesses, NSBA is urging caution as the Administration moves forward on any changes that would reshape the insurance market, and ensure that health insurance doesn’t move further out of reach for many small businesses and their employees.

NSBA President and CEO Todd McCracken weighed-in on the EO last week, stating, “The Administration’s focus on making health insurance more affordable is exactly the right one, but new rules in this area must be very carefully crafted to avoid actually increasing premiums for millions of workers, if healthier individuals are siphoned off into a lower-cost, benefit-light plan, leaving older, sicker people in unsustainable, costly insurance pools.”

Rather than tinkering on smaller pieces of the health care puzzle, NSBA is calling on the Administration and Congress to focus on the central issues primarily responsible for sky-rocketing health care costs: rewarding procedures instead of outcomes; hidden pricing structures; electronic records that fail to properly transport and communicate for the patient; and rampant defensive medicine.

Unfortunately, AHPs, as previously crafted, would do little to address these issues, despite the promise of lower costs through bulk purchasing. The realities of how AHPs would operate within the insurance market could actually result in higher health insurance costs for millions of small employers and their employees, and ultimately destabilize the entire health insurance market.

By enabling AHPs to circumvent state rules and licensing, sell plans that fall short of current required benefits, and allow for greater pricing consideration of the health and age of those covered, AHPs would likely attract only younger, healthier individuals, leaving the existing market flooded with older, sicker individuals.

Click here for a detailed backgrounder on AHPs.

For decades, NSBA has called for broad health care reform that is affordable, offers universal access, promotes individual responsibility, has proper market-based incentives, improves the quality of our care and eliminates wasteful care.  The Affordable Care Act has fallen far short of such reform; unfortunately, there is a danger that new insurance rules will simply scramble the list of ‘winners and losers’ without making real progress on our fundamental health care challenges.