Trump Restoring Affordability, Incrementally


This week’s health policy news roundup curated by Jane M. Orient, MD:

One of the fundamental design flaws (or is it a feature?) of the [Un]Affordable Care Act (ACA or ObamaCare) is the tax on the healthy. Those who have to buy coverage on the individual market or are uninsured—but in good health—must pay more, in some cases double and triple what they would have paid before, so that those with costly medical conditions can pay less. An escape valve from the guaranteed issue/community rating requirement is short-term, limited-duration plans. In mid-2016, writes Avik Roy, then-President Obama limited their duration to 3 months instead of the previous 364 days. President Trump has proposed new rules increasing the duration back to 364 days, and is considering renewability. Now that the individual mandate/tax has been zeroed out, these plans are much more attractive.

This rule would “legalize affordable care,” explains Sally Pipes.

ObamaCare also imposed a tax on small businesses in the form of costly mandates on small-group and individual policies from which large-group plans are exempt. Worse, writes Sally Pipes, the Obama administration deliberately denied small businesses and sole proprietors an escape hatch from the even higher-cost small-group market Obamacare created. Employers were blocked from forming association health plans (AHPs) offering non-Obamacare-compliant coverage unless the plan’s members could meet a strict “commonality of interest” requirement. A proposed rule by Trump’s Department of Labor would relax this requirement, giving more businesses access to care they could actually afford.

The proposed AHP rule brings simplicity and more access in several ways, including the formation of groups for the sole purpose of purchasing insurance, explains Josh Archambault.

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