The trade-off that comes with association health plans

Labor Secretary Alex Acosta in Washington on June 21. (Evan Vucci/Associated Press)

The Labor Department issued a final rule authorizing the expansion of association health plans over the objections of virtually everyone who weighed in on the proposal, including small businesses. Such broad opposition was with good reason.

The new rule may make it easier for a few small businesses with younger and/or healthier employees to purchase association health plans, but the trade-off is that these plans will cause the insurance market for small businesses to split, leading to major increases in premiums. These multistate plans will not have to include protections for people with preexisting conditions, nor will they be required to cover things such as maternity care. Also, the association-health-plans rule is redundant because small businesses are already allowed to work together to purchase health insurance. That system is called the small-group market, and the more people we have in this pool, the lower premiums will be for participants. Encouraging people to leave the small-group market, however, will harm small businesses by raising their premiums.

John Arensmeyer, Washington

The writer is founder and chief executive
of Small Business Majority.

Regarding Sen. Lamar Alexander’s June 20 Wednesday Opinion essay, “Health care is about to get better”:

Yes, the “association health plan” idea could be good: Let groups of people buy insurance together, just as big companies do — as long as insurers actually offer high-quality plans with comprehensive coverage. We shall see.

Where Mr. Alexander (R-Tenn.) got it wrong was in claiming the Affordable Care Act was bad for the self-employed and small businesses. For most of my 25 years of self-employment, I had health-insurance coverage though a “group” business policy that contained just one person (by the good graces of Maryland’s health-care laws). But I kept moving to worse plans because my premiums were going up by as much as 25 percent a year. I could not switch to a cheaper individual plan because of preexisting conditions. The ACA finally made it possible for me to get a better plan at lower cost.

The ACA attempts to level the playing field for everyone and rein in discriminatory practices by insurers. How did Mr. Alexander’s plumber in Memphis, songwriter in Nashville or bakery owner in Chattanooga end up worse off?

Eric Wenocur , Olney