Dive Brief:
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New association health plans are offering "comprehensive benefits and double-digit cost savings" and not barebones plans as feared, according to a new report by AssociationHealthPlans.com, a site devoted to the AHP market that proselytizes the plans.
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The new plans, including Land O' Lakes' AHP, offer many of the same protections as Affordable Care Act plans — though they are not required to. Critics including Democrats and advocacy groups like the American Cancer Society told a House panel this week lack of a mandate will weaken the ACA risk pool and could potentially harm patients.
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The Trump administration changed regulations for AHPs in September in hopes of sparking more small businesses and self-employed Americans to come together to buy health insurance through them.
Dive Insight:
Critics of AHPs questioned the Trump administration's decision last year to change regulations to make the plans an option for more people, worried about potential for fraud and that the plans may offer limited patient and consumer protections.
Kev Coleman, founder and president of AssociationHealthPlans.com, looked at the 34 AHPs formed across 13 states and said they aren't as restricted as some feared. Coleman said AHPs offer physician and specialist visits, hospitalization, emergency care, prescription drug coverage, maternity care, preventive care and mental healthcare. Some plans also provide health savings accounts for members. Half of the new AHPs have some type of medical savings account.
Coleman added that AHPs are resulting in lower overhead costs. Fully-insured AHPs allow small employers to collectively lower the percentage of premiums spent on administration and overhead costs (15% of premium dollars are going to overhead in AHPs compared to 20% for small business plans).
Some big names in healthcare, including UnitedHealthcare and Blue Cross Blue Shield plans, are involved with AHPs, the report found. Coleman said those payers provide 75% of coverage for AHPs that don't self-fund. Regional associations, including chambers of commerce, have launched nearly three-quarters of the new AHPs.
Half of the new AHPs are limited to companies between two and 50 employees, while 43% are open to sole proprietors and self-employed people. Few sole proprietors have entered into AHPs.
"As the AHP market matures, we should also expect the number of multi-state professional associations to increase. Since they involve more preparation and state filings, they will take a longer period to implement in the market," Coleman said in a statement.
AHP critics remain concerned about the future of the plans. A dozen attorneys general sued the Trump administration last year over the new AHP rule.
A 2018 report from the Society of Actuaries warned that as much as 10% of the ACA marketplace could go to AHPs. Many of those people could be young and healthy, which would leave an unstable risk pool in the ACA marketplace.
Keysha Brooks-Coley, vice president of Federal Advocacy American Cancer Society Cancer Action Network told the House Ways and Means Committee this week the move to expand AHPs and short-term health plans may harm cancer patients. The regulation allows plans to avoid ACA consumer protections, such as essential health benefits, she stressed.
The plans have their supporters, including Rob Robertson, chief administrator/secretary-treasurer for the Nebraska Farm Bureau, which offers an AHP. Robertson said before the same House panel that their AHP offers coverage regardless of pre-existing conditions.
"Let me be clear, we do not view our AHP as an attack on the ACA, but a companion to it that provides our member families with another health insurance option that offers them quality care at a reduced cost," Robertson said.