The Trump administration today proposed new rules to let certain small businesses and trade groups band together to buy health care, in its latest move that could weaken Obamacare’s insurance marketplaces.
The expansion of so-called association health plans is part of a broader effort to encourage the rise of cheaper coverage options that are exempt from certain Obamacare patient protections and benefit rules.
The proposed rules stem from an executive order President Donald Trump signed in October directing federal agencies to loosen restrictions on short-term health insurance and association health plans, in a bid to create more insurance competition and drive down premiums. The administration’s move was praised by many business groups and conservative lawmakers, including Sen. Rand Paul (R-Ky.), who has long advocated for an expansion of such plans.
“Conservative health care reform is alive and well, and I will keep working with President Trump to build on this progress,” Paul said in a statement.
However, state insurance regulators and Obamacare advocates have warned that lax rules could open the door to a new wave of poorly regulated health plans that exclude coverage of key services required by the Affordable Care Act, such as hospitalizations and prescription drugs.
“The Trump administration has declared open season for fraudsters selling junk insurance while those with pre-existing conditions will find health care further and further out of reach,” said Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee.
The new Labor Department rules come shortly after Congress eliminated the individual mandate in its tax overhaul, a move that will likely result in fewer people signing up for insurance — particularly the young and healthy. The administration is expected to soon release an additional proposal to expand the use of short-term insurance plans, which could further erode enrollment in Obamacare’s insurance marketplaces.