President Trump last week issued a Presidential Executive Order (EO) titled “Promoting Healthcare Choice and Competition Across the United States.” A key piece of the EO directed the Secretary of Labor to rewrite rules that will expand the opportunity for employers to band together across state lines to purchase health insurance as part of an Association Health Plan, or AHP.
PIA has long supported legislative efforts to expand AHPs as a means to lower health care costs for small and medium-sized printers, and has also eyed offering a potential industry AHP as a potential business development opportunity. Thus, the EO has sparked a dual interest in PIA achieving both outcomes on behalf of its member companies, and I wanted to share with you a few key points regarding the EO and next steps.
Background: AHPs and PIA’s Long Time Support
AHPs allow groups of individuals within a trade/industry association to create health insurance pools across state lines to increase purchasing power and price bargaining, similar to how most large corporations with multiple facilities in different states currently provide health coverage to their employees. In addition to providing greater administrative efficiencies, AHPs would be subject to fewer regulations (such as state-by-state mandates); again, this would put small business on par with large corporate fully-insured and self-insured plans. PIA and small business advocates have urged Congress to enact AHPs legislatively as a means to address the problems of health care choice, cost and access. In this Congress, the House has passed H.R. 1101 (“Small Business Health Fairness Act) by a vote of 236-175 and Senator Mike Enzi (R-WY) has introduced companion legislation (S. 1818, “Small Business Health Plans Act”).
It’s worth noting that the Senate bill contained expansion language that would allow for associations in the same line of business to be considered one group for the purposes of AHPs. For example, printing/packaging/newspaper associations might be able to meet such a guideline and expand the overall purchasing pool to the benefit of their mutual memberships. PIA supported inclusion of this language.
Because these bills have not moved forward and in light of the GOP failure to produce a fix to the Affordable Care Act, President Trump moved forward on the AHP issue using his Executive Branch power. The White House estimates that expanding AHPs along with Health Retirement 2 Accounts (HRAs, also addressed in the EO) would benefit roughly 35 million workers at small business that employer fewer than 50 individuals.
The EO: What it Does, Timing, Next Steps
The EO states that within 60 days (by December 15) the Secretary of Labor shall promulgate a regulation on AHPs. This will be part of a formal rulemaking process with the opportunity for public comment and industry input. In essence, this is where the “meat” will be put on the “bones” of the EO (and its accompanying press release).
A key question to address will be how “associations” are defined. In legislative history, it has been defined as a trade association operating for a minimum of “x” years and one that was formed for a bona fide purpose other than offering health insurance. Will this remain AND will expansion language supported by PIA be included to widen risk pools to include multiple associations within common or supply-chain industries? Additionally, the “usual suspects” (namely, the National Association of Insurance Commissioners, who regulate the state health insurance markets) will be a force opposing the AHP effort and would likely challenge it legally at some point.
Finally, major health insurers have been opposed to AHPs in the past on the basis that the association risk pools would “cherry pick” healthy individuals out of the current Affordable Healthcare Act plans. These familiar arguments will be reprised throughout the rulemaking process. It is also likely that other federal agencies are pulled into the mix throughout the rulemaking, namely Treasury and Health and Human Services.
In sum, there is no smooth sailing or guarantees with health care policy even with the issuance of an EO calling for AHPs. However, it is critical that PIA monitors and engages in the regulatory process to pursue workable AHPs just as it has done in the Legislative branch for many years.
How Can PIA Make An Impact?
PIA is already engaged in the legislative process, and will now switch focus to the regulatory space. For the next 90 days, PIA is partnering currently with the National Newspaper Association to engage The Brightup Group to monitor the regulatory effort and to take active steps to ensure the industry voice is present during the initial rulemaking process. This will include meeting with Labor Department officials as they draft an AHP proposal, submission of formal comments, and more.