One of President Trump’s healthcare initiatives intended as a cheaper alternative to Obamacare suffered a crucial defeat in Washington after a judge ruled the policy violates the Affordable Care Act.
U.S. District Judge John Bates on Thursday blocked new rules governing so-called association health plans, which let businesses and individuals band together to create group plans that offer less expensive coverage than the Affordable Care Act — but without some of its protections.
The ruling is a victory for nearly a dozen Democratic state attorneys general who sued to block the policy last year. The judge’s findings come as the Trump administration is renewing its effort to unwind Obamacare by declining to defend it in court.
“The final rule is clearly an end-run around the ACA,” Bates, a 2001 appointee of Republican President George W. Bush, said in the ruling. “Indeed, as the president directed, and the secretary of Labor confirmed, the final rule was designed to expand access to AHPs in order to avoid the most stringent requirements of the ACA.”
The final rules governing association health plans were created by the Labor Department to comply with an executive order issued by Trump in October 2017. The agency has been phasing them in since August.
Some plans are already on the market, with offerings from UnitedHealth Group Inc. and Anthem Inc. either available now or on the way.
Bates cited the “absurdity” of the Labor Department’s interpretation of a rule forming the basis of the initiative.
The attorneys general — led by New York and including California as well as the District of Columbia — argued that the new rules violate Affordable Care Act provisions as well as the Employee Retirement Income Security Act, commonly known as ERISA.