Trump’s ex­ec­u­tive or­der has a his­tory

The Washington Post - - POWERPOST - paige.cun­ning­ham@wash­post.com More at wash­ing­ton­post.com/ news/ pow­er­post PAIGE WINFIELD CUN­NING­HAM

Pres­i­dent Trump signed an ex­ec­u­tive or­der Thurs­day ex­pand­ing what’s known as “as­so­ci­a­tion health plans.” But 25 years ago, fed­eral watch­dogs con­cluded such plans ripped off hun­dreds of thou­sands of Amer­i­cans by re­fus­ing to pay their med­i­cal claims while vi­o­lat­ing state in­sur­ance laws and even crim­i­nal statutes.

Back in 1992, the Govern­ment Ac­count­abil­ity Of­fice is­sued a scathing re­port on th­ese mul­ti­ple em­ployer wel­fare ar­range­ments (known as MEWAs; they’re pro­nounced “mee-wahs”) in which small busi­nesses could pool funds to get the lower-cost in­sur­ance typ­i­cally avail­able only to large em­ploy­ers.

Th­ese MEWAs, said the govern­ment, left at least 398,000 par­tic­i­pants and their ben­e­fi­cia­ries with more than $123 mil­lion in un­paid claims between Jan­uary 1988 and June 1991.

Fur­ther­more, states re­ported mas­sive and wide­spread problems with MEWAs. More than 600 plans in nearly ev­ery U.S. state failed to com­ply with in­sur­ance laws. Thirty-three states said en­rollees were some­times left with­out health cov­er­age when MEWAs dis­banded.

In one of the most egre­gious cases, a Cal­i­for­nia-based MEWA called Rubell Helm In­sur­ance Ser­vices en­rolled thou­sands of Flor­ida res­i­dents with­out their knowl­edge but failed to pay any large claims.

“MEWAs have proven to be a source of reg­u­la­tory con­fu­sion, en­force­ment problems and, in some in­stances, fraud,” the GAO wrote at the time.

Of course, Pres­i­dent Trump de­scribed such plans quite dif­fer­ently dur­ing his an­nounce­ment af­ter sign­ing the ex­ec­u­tive or­der aimed at mak­ing it eas­ier for as­so­ci­a­tion health plans to form, op­er­ate across state lines and duck cov­er­age reg­u­la­tions un­der the Af­ford­able Care Act.

Crit­ics of the ac­tion in­clude state in­sur­ance com­mis­sion­ers and much of the health in­dus­try be­cause, they ar­gue, the new plans would draw healthy cus­tomers out of the ACA mar­ket­places and in­crease costs for sicker pa­tients.

Trump said the move was one of many he will take to weaken the im­pact of Oba­macare af­ter Repub­li­cans in Con­gress failed in mul­ti­ple at­tempts to re­peal and re­place the law.

The ef­fects of his ex­ec­u­tive or­der could be dif­fer­ent from what the pres­i­dent an­tic­i­pates.

As­so­ci­a­tion health plans — which are ba­si­cally MEWAs that are tied to a trade as­so­ci­a­tion (such as the U.S. Cham­ber of Com­merce) — have been around for a long time, but had to op­er­ate in a sin­gle state and were sub­ject to ACA reg­u­la­tions un­der Obama-era rules.

Trump is seek­ing to broaden their abil­ity to func­tion by in­struct­ing a trio of Cabi­net de­part­ments to re­write the fed­eral rules gov­ern­ing them.

In th­ese ar­range­ments, a trade as­so­ci­a­tion ac­quires health cov­er­age that small busi­nesses, in­di­vid­u­als or non­prof­its could buy into.

Trump and some Repub­li­cans are billing th­ese as­so­ci­a­tion health plans as a way to of­fer lower-cost op­tions to con­sumers amid an oth­er­wise toxic ocean of Oba­macare reg­u­la­tions.

By pur­chas­ing in­sur­ance through as­so­ci­a­tions, small busi­nesses and in­di­vid­u­als could po­ten­tially duck the ACA’s cov­er­age re­quire­ments — in­clud­ing its 10 “es­sen­tial health ben­e­fits” — that don’t ap­ply to large group plans.

Repub­li­cans say this will lead to lower-cost health in­sur­ance and the abil­ity of Amer­i­cans to choose from a broader ar­ray of in­sur­ance op­tions that bet­ter fit their needs.

Of course, the de­tails of the an­tic­i­pated ex­ec­u­tive or­der will mat­ter. One of the big­gest problems with as­so­ci­a­tion plans — ac­cord­ing to the GAO — is that they of­ten flew un­der the radar of state in­sur­ance reg­u­la­tors.

“At the heart of reg­u­la­tion and en­force­ment problems is the fact that state reg­u­la­tors are of­ten con­strained by the in­abil­ity to iden­tify MEWA un­til af­ter MEWA problems oc­cur,” the re­port says.

Some­times plans tried to duck reg­u­la­tions en­tirely, the agency found. Forty-two states said MEWAs had claimed ex­emp­tion from state laws un­der the Em­ployee Retirement In­come Se­cu­rity Act (ERISA) of 1974, which had al­lowed MEWAs in the first place. Courts mostly sided with the states in th­ese le­gal bat­tles, but they still cost states large amounts of staff and time.

Th­ese problems are partly why the Obama ad­min­is­tra­tion ac­tu­ally cracked down on as­so­ci­a­tion health plans as it was im­ple­ment­ing the ACA. In 2011 guid­ance, the Depart­ment of Health and Hu­man Ser­vices said as­so­ci­a­tion plans must com­ply with the health-care law’s con­sumer pro­tec­tions just like any other in­di­vid­ual or small group plan.

Yet Trump is now poised to re­write the rules, turn­ing to the 43-year-old idea of as­so­ci­a­tion health plans — which the govern­ment has found some se­ri­ous problems with in the past — as his way of re­shap­ing Obama’s ACA.

“What is old is new again,” as one health-care con­sul­tant told me.

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