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Expert Voices

Clearing the air on AHPs

From our Expert Voices conversation on plans for health care reform after Trump's executive order:

The executive order calls for broadening the definition of a "bona fide group or association" to allow a greater number of small employers that are members of local chambers of commerce or a national trade association to form fully insured "large group" or self-insured "group" association health plans.

While it's true that association health plans would not be subject to the ACA's "essential health benefits" and "actuarial value" requirements — rules that apply to "small group" and "individual" market plans — this exemption has been misrepresented to suggest that these plans can (1) deny a person coverage if they have a pre-existing condition, (2) refuse to cover preventive services, and (3) impose annual and lifetime limits on the essential health benefits.

All three claims are false. Those practices are prohibited under ACA "group health plan" standards that continue to apply. And others remain in force too — most notably, coverage for adult children up to age 26, free access to emergency care, and protections against rescinded coverage except in cases of fraud.

A fully insured association health plan is also subject to state benefit mandates, most of which are as good if not better than the federal "essential health benefit" standard. Penalties may apply to self-insured association health plans that do not cover specific "essential health benefits," including hospitalization and physician services.

Why it matters: Association health plans are by definition required to provide adequate coverage, and additional federal protections apply, including fiduciary responsibilities, a rigorous appeals process, and prohibitions against basing premium rates on an individual participant's health condition.

Other voices in the conversation:

  • James Capretta, resident fellow at the American Enterprise Institute and former associate director for health programs at the OMB: Alexander-Murray deal a flawed first attempt at bipartisanship
  • John McDonough, professor at the Harvard T.H. Chan School of Public Health and former Senate adviser on health reform: Obamacare is dead. Long live the Affordable Care Act.
  • Jeanne Lambrew, senior fellow at the Century Foundation and deputy assistant to the president for health policy in the Obama White House: Health care fix today could be undone tomorrow
  • Tevi Troy, CEO of the American Health Policy Institute and former deputy secretary of HHS: Expanding HRAs would bolster individual market