Cheaper Insurance for Small Businesses 👛

 Photo: Marco Ugarte / AP

Photo: Marco Ugarte / AP

A new healthcare rule

The Trump administration released the Association Health Plan (AHP) rule that will permit small businesses and self-employed individuals to purchase low-cost health insurance plans that do not have certain benefits required by the Affordable Care Act (ACA aka Obamacare). Qualified parties will be able to band together with others in the same geographical area or same industry under a cheaper nationwide plan.
 

Circumventing the ACA

The ACA has received criticism for being expensive and requiring too many mandates. The AHP plans will not be required to comply with certain ACA requirements such as the essential health benefits. These benefits include maternity and newborn care, prescription drug costs, and mental health treatment.

 



Those in favor of the proposal highlight that small businesses and self-employed individuals do not have access to low-cost plans, tax breaks, and patient protections that large employers do. They also acknowledge that while the new rule would exempt AHPs from meeting the ACA’s essential health benefit, Democrats afforded this exemption to large employers in 2010. Lastly, they emphasize that the new proposal expands access to affordable healthcare without increasing federal spending.

Those opposed to the new proposal claim that it will allow Americans to purchase plans that are sparse and without vital ACA requirements. They contend that this will eventually result in individual and small-group exchanges having a larger proportion of chronically ill individuals, ultimately increasing their cost. They also criticize the proposal as an attempt by Republicans to gain a boost prior to the midterm elections.

What does this mean?

At first glance, the AHP is cheaper than existing options, but it will take time before the true cost is known. For now, the CBO has predicted that premiums for ACA plans will rise by 2-3%. Trump has always promoted the sale of healthcare plans across state lines, however, it is important to remember that medical costs are subject to geography. Yes, healthcare continues to remain complicated. 

Trying to understand healthcare


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