Two blue states said Wednesday they will sue the Trump administration over its decision to get around Obamacare by letting small employers and self-employed people pool together and buy health plans that are cheaper and cover fewer benefits than what the 2010 law dictates.
New York Attorney General Barbara D. Underwood and Massachusetts Attorney General Maura Healey said the new rule, which could lead to millions shirking the Obamacare market and purchasing association health plans (AHPs) instead, exceeds the administration’s authority and will “invite fraud, mismanagement, and deception.”
“As we’ve made clear, will do nothing to help ease the real healthcare challenges facing Americans. We believe the rule, as proposed, is unlawful and would lead to fewer critical consumer health protections,” said the attorneys general, both Democrats. “We will sue to safeguard the protections under the Affordable Care Act and ensure that all families and small businesses have access to quality, affordable health care.”
The association plans have long been a goal for congressional Republicans who say it’s a way for people to take advantage of the group insurance market, even if they are self-employed or work for a business too small to provide insurance.
It’s also the first major change the administration has made to Obamacare’s framework since Congress repealed the individual mandate in last year’s tax-cut bill.
Under the new rule, released Tuesday, small companies can join forces within a geographic area or even nationwide, if they employ the same trade, such as baking or real estate.
The plans must abide by the same protections for sicker or older Americans as those that apply to large companies, yet they wouldn’t have to cover the full range of benefits mandated by the 2010 Affordable Care Act, so things like mental health or maternity care might be missing.
Those hefty coverage rules have been blamed for hiking prices of health plans across the board, forcing customers to pay for services they don’t want.
Blue-state attorneys general say the expansion of association health plans is the wrong way to extend cheaper options. They say historically, bad actors have come in and swindled consumers by swiping premiums and refusing to pay claims.
In comments to the Labor Department, they said Congress worked hard to set up patient protections that limit the plans’ sale and require robust coverage.
The new rule, they told the administration, is “an unlawful attempt to accomplish by executive rule-making changes in law and policy that lie within the power of Congress — and that Congress has refused or failed to adopt.”
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