New health plan less expensive, skimpier
Insurance targets small companies, self-employed
WASHINGTON — The Trump administration’s new health insurance option offers lower premiums for small businesses and self-employed people, but the policies are likely to cover fewer benefits.
Another caveat: if healthy people flock to the new plans as expected, premiums will rise for those who need comprehensive coverage.
President Donald Trump and Labor Secretary Alex Acosta rolled out their final blueprint for “association health plans” on Tuesday, with Trump promising a smallbusiness group that “you’re going to save massive amounts of money and have much better health care.”
Democrats decried it as “junk insurance,” and some patient groups warned it could undermine coverage for people in poor health. Republicans and some small-business groups said the administration is providing needed flexibility in the face of rising premiums.
Independent experts said the administration is setting up a parallel insurance market — with different rules — alongside the Affordable Care Act, the Obama-era law Trump has been unable to repeal.
Initial estimates by the nonpartisan Congressional Budget Office forecast modest changes, not a seismic shift.
The new plans created under the administration’s regulation incorporate the same protections for employees with pre-existing conditions that large-company plans now have, Acosta said.
The Labor Department said association plans could be offered to employers in a city, county, state or a metro area that includes several states. Plans within a particular industry — real estate, for example — can be marketed nationwide. Sole proprietors and their families could join an association plan.
Trump has long asserted that promoting the sale of health insurance across state lines can bring down premiums without sacrificing quality. But many experts aren’t convinced because medical costs vary greatly according to geography.
Currently, plans for small businesses are required to cover the ACA’s 10 categories of “essential” benefits, from prescription drugs to maternity and mental health. Under the new approach, small employers could get coverage that comes with fewer required benefits, said Gary Claxton of the nonpartisan Kaiser Family Foundation.
Acosta cited CBO estimates that predict a modest impact: about 4 million people covered by the plans within five years but only some 400,000 who would have been uninsured. Compare that to the total number of about 160 million covered by jobbased insurance.