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Experts, AAFP, ACP criticize Trump’s ‘Small Business Health Plan’ proposal
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The U.S. Department of Labor’s proposed rule to increase opportunities for employment-based health insurance to small businesses seems to do more harm than good, experts and medical societies told Healio Family Medicine.
Among the concerns were that it undercuts the minimum standards of coverage established under the Affordable Care Act while potentially forcing practices to navigate the bureaucracy of new health care providers.
On Jan. 5, the Federal Register published a proposed rule that, according to a press release, would enable employers and sole proprietors to join to form a Small Business Health Plan based on geography or industry.
A press release stated that these proposed plans, also known as Association Health Plans, cannot charge individuals higher premiums or refuse to allow employees to join a plan because of health factors, thus providing “important protections” for Americans. The release also indicated that if adopted, the rule could help up to 11 million Americans get health insurance.
“I don't like the plan,” Philip A. Verhoef, PhD, MD, FAAP, FACP, assistant professor of medicine and pediatrics, University of Chicago told Healio Family Medicine.
His conclusion is based on several factors, most significantly that it creates what he called a “loophole” in coverage that will result in the growth of “extremely skinny plans,” which do not cover conditions currently required under the ACA, and will lead to “underinsurance.” Verhoef also said most patients will likely choose the cheapest plan, which in turn, he said would impede access to medical services and, as a separate concern, would force insurance companies that lose healthy subscribers to substantially raise prices for both healthy and sick patients who remain.
“This plan will indeed likely allow more people to access options for purchasing coverage, which should be a good thing ... except that the coverage will almost certainly be substandard, narrow, and result in the ultimate shifting of greater health care costs on to individuals, not to mention that it violates a number of consumer protections as well as undermines state-level powers,” Verhoef said. “This [plan] will hurt more than it helps.”
Susan Thompson Hingle, MD, MACP and chair, American College of Physicians Board of Regents, agreed that the plan could be financially crippling, even to patients who have insurance.
Other components of the proposal also “fail” the test of protecting patients, she said in a statement.
“Plans would no longer have to cover medical care patients need; plans could choose not to cover pregnancy, maternity, and newborn care, or even chemotherapy. This would also mean that the [Affordable Care Act’s] prohibition on annual and lifetime limits on coverage would no longer apply to any service an employer decides is not essential,” Thompson Hingle said.
“Further, the executive order would permit individuals to keep bare-bones insurance plans longer-term,” she continued. “Under the ACA, these types of plans were intended to be temporary while they purchased a plan that complied with the law’s protections.
Michael Munger, MD, AAFP president, also expressed concern about the plan, citing its lack of significant coverage and possible discriminatory nature.
“This regulation is a step away from consumer protections under the [ACA] because association health plans would be exempt from ACA’s essential health benefits requirements. As a result, insurers could discriminate against any individual based on their health status, age or gender,” he said in a statement.
“While we acknowledge that these plans may extend limited access to coverage for currently uninsured individuals, we worry that this is a real-life example of ‘you get what you pay for’ and the coverage guaranteed under these plans would be neither adequate nor meaningful,” Munger continued. “Women and older, sicker Americans would likely face higher costs and fewer affordable insurance options.”
The proposed rule is a throwback to earlier times, said Robert Greenwald, faculty director of the Center for Health Law and Policy Innovation at Harvard University.
“Expanded access to Association Health Plans will undermine many of the significant consumer protections we gained with health care reform. Association health plans would not only be able to offer skimpier coverage, they would also be able to design plans that discourage people living with chronic conditions from enrolling,” he said. “The effects of this rule could bring us back to the days when health care options available to Americans did not cover the care necessary to live and stay healthy.”
Memo Diriker, DBA, MBA, BS, and director of the Business, Economic, and Community Outreach Network Franklin P. Perdue School of Business at Salisbury University, told Healio Family Medicine the proposed rule could add to the burden many doctors already face.
“Physicians already have to deal with an incredible array of payment options. My hunch is that [the proposal] will just add to the complexity that already exists... Until there is a ‘Universal Payment/Reimbursement Protocol across different insurance carriers, any new plan means one more payment system to learn. Imagine a scenario where several industry-based plans and several geographic area-based plans being added,” he said. “Unless each plan has the same paperwork and procedural requirements, life is going to get tougher and overhead costs are going to increase for primary care (and other) physicians.”
Diriker also pointed out possible positives of the proposed rule: it could encourage more people to start their own businesses and could result in smaller companies attracting more qualified candidates for jobs.
“Potential entrepreneurs who are currently employed are afraid to pull the trigger on their business plans for fear of life without their employer subsidized health insurance. Those who are not currently employed give up on their dreams of starting their own business and seek employment that offers health coverage,” he said. “For existing small businesses, the high cost of health insurance for very small groups means they cannot hire the best candidates who are naturally seeking coverage and frequently accept lower paying jobs as long as there is coverage. Advocates for entrepreneurship and small- to medium- sized businesses have long called for these ‘association plans’ that pool resources and form a larger group to spread the costs. If done right, this would be a welcome development for these businesses.”
The public has 60 days from the rule’s Jan. 5 publishing date to comment on the proposal. Procedures for submitting comments, can be found at the Federal Register’s website: www.federalregister.gov. – by Janel Miller and Alaina Tedesco
Disclosure: Munger is president of AAFP, Thompson Hingle is chair of the board of regents at ACP. Healio Family Medicine was unable to determine the other financial disclosures prior to publication.