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Trump administration finalizes rule to allow for skimpier health plans

Trump administration finalizes rule to allow for skimpier health plans
Many experts worry that the Trump administration's moves to allow more skimpy health plans will weaken insurance markets across the country. (Associated Press)

The Trump administration Tuesday advanced its plan to promote the sale of skimpier health insurance, finalizing a new rule that would make it easier for individuals and small businesses to band together to get plans that don’t offer a full set of health benefits.

Administration officials say these so-called association health plans, or AHPs, will provide a more affordable option for Americans who don’t get health coverage through an employer or a government health program such as Medicare or Medicaid.

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"AHPs are about more choice, more access and more coverage,” said Labor Secretary Alex Acosta, whose agency issued the regulations. “The president's decision helps working Americans — and their families — purchase quality, affordable health coverage.”

But President Trump has also made promoting less comprehensive health insurance a central part of his campaign to dismantle the Affordable Care Act, often called Obamacare.

Many patient advocates and independent experts say loosening health insurance rules, while possibly making health coverage more affordable for some healthy people, will push up costs for those who need more comprehensive benefits.

Less stringent rules may also put consumers in health plans that don’t cover the services they need if they get sick.

“These plans would provide many consumers with inadequate protection,” warned Ceci Connolly, president of the Alliance of Community Health Plans, an organization of leading health insurers, including Kaiser Permanente, HealthPartners in Minnesota and UPMC Health Plan in Pennsylvania.

The association health plan regulation and a second proposal to broaden availability of short-term health plans that can also offer skimpier benefits have drawn widespread criticism from patient advocates, physician and hospital groups and many health insurers and state regulators.

A Los Angeles Times analysis of official comments filed with federal agencies found that more than 95% — or 266 of 279 — of the healthcare groups that filed comments about the proposed association health plan regulation expressed serious concern or opposed it.

And more than 98% — or 335 of 340 — of the healthcare groups that commented on the proposal to loosen restrictions on short-term health plans criticized it, in many cases warning that the rule could gravely hurt sick patients.

Among the groups that have opposed the Trump administration’s moves are virtually every leading patient advocate in the country, including the American Lung Assn., the American Heart Assn., the Cystic Fibrosis Foundation, the March of Dimes, the National Multiple Sclerosis Society, Susan G. Komen, AARP and the advocacy arm of the American Cancer Society.

The Trump administration is still finalizing the short-term health plan regulation.

Association health plans, which have existed for years, have long been favored by trade groups because they can allow small businesses that have trouble getting health insurance to pool together to get better rates.

That can give small businesses similar advantages to large employers.

The new regulation would prohibit these plans from turning away sick consumers or charging more to people with preexisting medical conditions, two popular protections enacted in the 2010 healthcare law.

But the plans would be able to skirt another key consumer protection in the current law that requires health plans sold directly to consumers to offer a basic set of health benefits, including prescription drugs, maternity care and mental health and substance abuse services.

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Some state regulators, including those in California, would likely step in to require association health plans sold in their state to continue to offer more robust health benefits.

But in other states, the new regulation could allow plans with fewer benefits to proliferate, experts warn.

State regulators, meanwhile, have cautioned that association health plans have a long history of fraud and instability, as associations proved unable to manage complex health insurance and collapsed.

“These insolvencies, whether through malice or incompetence, resulted in significant unpaid claims and the loss of health insurance for participants,” the National Assn. of Insurance Commissioners noted in its official comments on the proposed rule.

Trump administration officials said the new regulations will not prevent state officials from adequately overseeing the plans.

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