Sen. Paul: Association health plans open new coverage options

Looking to “big government” for answers to skyrocketing healthcare costs may be some politicians' solution, but that only results in giving the American people more frustration and fewer options—along with still-expensive healthcare.

Throughout 2017, I worked directly with President Donald Trump and his administration on a pro-patient, pro-family, and pro-worker reform proposal that flips the status quo script and returns power to the American people to find the healthcare coverage that best meets their needs at a price they can afford.

Known as association health plans, or AHPs, this alternative allows small businesses and self-employed individuals to join together to be considered as a large group for the purpose of offering health insurance as an employee benefit, similar to a single large employer plan. AHPs allow thousands or even millions of Americans to join together to achieve better negotiating power with large insurance companies, decrease administrative costs, and get more comprehensive benefits.

Last October, President Trump officially paved the way to allow more people to join AHPs through an executive order entitled “Promoting Healthcare Choice and Competition Across the United States.”

That's exactly what this effort is all about: providing more choices in a way that is allowed under current law but has for decades gone underutilized due to government barriers created through a closed process.

Our reform expanded the types of groups that can band together to form AHPs, and it empowered self-employed Americans who have no other employees to find family coverage through a large-group AHP, including a self-insured plan.

Prior to the Labor Department issuing its final AHP rule this past June, outdated administrative guidelines forced small businesses and the self-employed to remain in the high-cost small group and individual markets—yet another government barrier to businesses growing and hiring more workers.

Unfortunately, the new rule maintains state regulation, and AHPs are additionally subject to federal laws such as the Employee Retirement Income Security Act, HIPAA and parts of the ACA, which means AHPs will still not achieve the cost savings that multistate large corporate plans do.

While the Labor Department did a great job putting forward this rule, more needs to be done so these plans can more easily operate nationwide and achieve the size and scale necessary to be a viable option for as many businesses as possible.

In particular, Congress will need to change the law to allow legitimate associations that have health plans to operate across state lines, ensuring AHPs have the same exemptions from state regulations large corporations already get—to help groups such as National Federation of Independent Business and the Chamber of Commerce—reach the necessary economies of scale.

I also believe Americans should be able to access AHP coverage through individual membership in a broad array of organizations like the National Rifle Association, Costco or even eBay.

Such freedom has the potential to be transformative, and I will continue fighting to help more Americans gain access to affordable group coverage.