Farm Bill Includes Funding for AHPs

May 23, 2018

Although the House farm bill failed to receive the 206 votes (198 to 213) necessary for passage last week, it did include a provision to authorize up to $65 million to help agricultural organizations set up association health plans (AHPs) to cover their members. Essentially, it calls for loans and grants administered by the Department of Agriculture to help organizations establish agricultural-related policies modeled on AHPs.

AHPs are health plans offered through organizations whose members usually share a professional, employment, trade or other relationship, although the Trump Administration will soon finalize new rules, widely expected to broaden eligibility, while loosening the rules on benefits these plans must include. The proposed rule, if finalized, would make it easier for groups to form AHPs and effectively exempt AHPs with small business and individual members from many standards and consumer protections that would otherwise apply.

If the federal rules are finalized, AHPs covering individuals and small groups would not have to cover the Affordable Care Act’s (ACAs) list of essential benefits, so they could — and likely would — exclude or sharply limit coverage of benefits such as mental health care, substance use disorders, and prescription drugs. Also, AHPs could charge higher premiums based on age (a practice the ACA restricts in the individual and small-group markets) or base premiums in part on characteristics such as a person’s occupation or gender.

Because AHPs could operate under weaker consumer-protection standards, they would be able to charge lower premiums to healthier individuals and small groups, and lure them away from the insurance markets that typically serve them. If enrollment in AHPs is significant, this would likely push up premiums in those other markets, raising costs for people who want more comprehensive coverage or who can’t access cheaper plans in the shadow markets, such as people with pre-existing medical conditions.

Under the farm bill plan, starting next year, the secretary of Agriculture could grant up to 10 loans of no more than $15 million each to existing associations whose members are ranchers, farmers or other agribusinesses. The $65 million would be available for four years under the proposal.

The language is similar to a bill introduced on April 12 by Rep. Jeff Fortenberry (R-Neb.), where a Farm Bureau and other “qualified agricultural associations” could apply for a grant or loan from the Secretary of Agriculture to help set up and operate a group health plan for members.

The farm bill — including the AHP provision — was approved by the House Committee on Agriculture in mid-April, but failed to pass the House floor on May 18. Although the farm bill (H.R. 2) is usually considered “must-pass” legislation by many lawmakers, this year’s version faced pushback because of controversy surrounding other parts of the measure — mainly language that would add additional work requirements to the food stamp program. Despite this, the House will vote for a second time on the $867 billion bill on June 22.

Meanwhile, a final rule on the Trump AHP rule, which has drawn more than 900 comments from supporters and opponents, could be issued as early as mid-summer. Please click here to read NSBA’s full AHP comment letter.