AAFP Warns Against Expanding Association Health Plans

Labor Department Proposal Would Sidestep Essential Health Benefits Rule

March 07, 2018 11:44 am News Staff

As the Department of Labor considers allowing self-employed individuals and small businesses to band together to purchase association health plans (AHPs), the AAFP is cautioning that the move could lead to an expansion of health plans that provide fewer benefits at higher costs.

[blue road signs stating insurance and risk]

A proposed rule(www.gpo.gov) published Jan. 5 in the Federal Register would permit small employers and self-employed individuals to join an association for the purpose of obtaining health insurance. Such plans would not have to cover the list of essential health benefits (EHBs) laid out in the Patient Protection and Affordable Care Act (ACA), and they would be exempt from the ACA rule that requires insurers to spend at least 80 percent of premium revenue on medical care.

The AAFP sent a letter dated March 5(3 page PDF) to Jeanne Klinefelter Wilson, deputy assistant secretary for policy in the Employee Benefits Security Administration at the Department of Labor, outlining the pitfalls of expanding health plans that do not meet minimum coverage standards.

"The AAFP strongly supports the goal of providing robust access to affordable health care coverage for all Americans, but AHPs move us further away from that goal," said the letter, which was signed by Board Chair John Meigs, M.D., of Centreville, Ala.

Recognizing that plans with lower standards could have lower premium costs that might prove more attractive to some individuals, the AAFP warned that the proposal could reduce coverage.

"While relaxing EHB requirements could decrease cost for healthy enrollees, and thus potentially attract younger and healthier consumers, it could also endanger coverage for a more vulnerable population," the letter stated. "Women and older, sicker Americans would likely face higher costs and fewer affordable insurance options."

AHPs would be required to accept all applicants and could not deny individuals with pre-existing conditions or charge more for people who are sick. However, they could reduce prescription drug coverage and increase coverage in another category to compensate for the reduction, the effect of which would be to increase costs for chronic care patients.

"While competition is important and serves as a tool to increase the availability and affordability of services, we do not think greater competition should come at the expense of meaningful insurance coverage," the letter stated.

The AAFP also registered increasing concern with rising deductibles in employer-sponsored, small group and individual insurance markets. Higher deductibles can create a disconnect between patients and their primary care physician and may lead to patients forgoing care. To protect against this, the AAFP continues to advocate for the creation of a primary care benefit(6 page PDF) that would enable individuals with high-deductible health plans (HDHPs) to obtain necessary primary care services -- including evaluation and management codes 99201-99215, prevention and wellness codes 99381-99397, chronic care management, and transition care management.

"The establishment of a standard primary care benefit would guarantee connectivity to the health care system for individuals with HDHPs and serve as a guardrail against disease progression that leads to more costly care," the letter stated.

Related AAFP News Coverage
Leader Voices Blog: Primary Care Benefit Could Improve Outcomes, Lower Costs