Republican proposals would help association health plans: Analysts

Two health policy analysts say Republicans could expand employers’ access to association health plans.

Allison Orris and Claire Heyison make that prediction in a review of Republican health coverage proposals prepared for the Center on Budget and Policy Priorities. The center is a think tank, or independent research center, that describes itself as non-partisan. It historically has had close ties to Democratic candidates.

An association health program can give small employers a chance to get away from what they see as burdensome state health insurance rules, by joining groups with self-insured health plans.

Self-insured health plans are regulated by the federal Employee Benefit Security Administration.

Orris and Heyison oppose expansion of access to the association health plan strategy. They believe increased use of AHPs could encourage employers with younger, healthier workers to use poorly regulated AHPs that may be exempt from some Affordable Care Act health insurance requirements.

“Expanding subpar plans in this way would weaken the ACA marketplace by drawing healthier individuals into alternative coverage arrangements,” the analysts write.

That could leave employers with older, sicker workers in the fully insured group insurance market and increase group insurance premiums, the analysts say.

Related: DOL reverses Trump-era ‘multiple employer’ Association Health Plan Rule

The analysts note that one major Republican health policy document, a proposed Republican Study Committee budget, encourages AHP program expansion.

Another Republican policy document, Project 2025, also calls for AHP program expansion, the analysts say.

The analysts also note that the Republican Study Committee budget and Project 2025 call for a revival for the old rules for short-term health insurance that were in place before the administration of President Joe Biden changed the rules.

Biden administration regulations have tried to keep people from using short-term health insurance as an alternative to major medical insurance by capping the duration of any one short-term health insurance policy at three months.

Before, in some states, consumers could use policy extensions to keep short-term health insurance arrangements in place for as long as three years.

Another Republican Study Committee budget proposal could let workers use the cash in health savings accounts and the employer-contributed cash in health reimbursement arrangements to pay for memberships in health care cost-sharing ministries and direct primary care arrangements, the analysts say.

Health care cost-sharing arrangements are treated as religious organizations that are exempt from the federal ACA rules applied to health insurers.

Many appear to be basing how they allocate member contributions on the design of the kinds of high-deductible, member-owned indemnity health insurance arrangements that might have been use in the 1950s or 1960s.

Direct primary care arrangements let patients pay a subscription to get ordinary care from one provider or provider group.

“These arrangements, which are often marketed as alternatives to comprehensive coverage, in fact cover far fewer benefits and may leave people exposed to catastrophic medical costs if they get sick,” Orris and Heyison write.