WASHINGTON — Small businesses and self-employed Americans would be able to bypass Obamacare's rules to buy less comprehensive health insurance plans under new rules proposed Thursday by the Trump administration.
The regulations, which were posted online for public comment and are not yet final, stem from an executive order that President Donald Trump issued in October. They would allow smaller companies and some individuals in the same industry or region to band together and sell "association health plans," which would no longer have to offer "essential health benefits" required under Obamacare like prescription drugs, mental health or maternity care.
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For some Americans, the result could be lower premiums, which would be balanced against a heightened risk that they won't be reimbursed for the cost of various health needs. The proposal suggests that newly expanded associations would have more bargaining power with insurers to negotiate prices as well.
But experts also say the move could raise premiums for companies that continue to offer fuller coverage and whose employees have more expensive needs, since employers with healthier workers would be more attracted to the skimpier association plans. If enough self-employed workers join association plans under the new rules, it could raise premiums on the individual market as well.
"The single biggest item is that (association health plans) will be exempt from essential health benefit requirements," Matthew Fiedler, a fellow at the Brookings Institution's Center for Health Policy, said in an e-mail. "That will allow them to craft plans that are likely to appeal to healthier enrollees, siphoning those enrollees from the ACA-compliant market."
Association health plans would not be able to charge companies more based on their workers' health, a move the administration says is designed to prevent insurers from cherry-picking healthy clients. But they would be able to vary premiums based on age. A small tech firm of 20-somethings might rush to sign up for an association plan with limited coverage, but an auto repair company whose employees are older and have chronic conditions might have to pay more to find an Obamacare-compliant plan that meets their needs.
The proposal contributes to the broad uncertainty about Obamacare's immediate future as Congress and the White House reshape the program.
The president recently signed a tax bill that undid the law's requirement to purchase insurance, which is expected to raise premiums and reduce coverage. The administration is also considering new rules that would open up less regulated short-term plans to more people, which could similarly attract healthier customers while raising premiums elsewhere.
Congress is considering bipartisan legislation aimed at stabilizing insurance markets under Obamacare, but its prospects are unclear.