The association health plans are expected to serve more than 15,000 farmers in Minnesota and 28,000 farmers in Nebraska.
The company’s multistate association health insurance plans were made possible by regulatory changes enacted by the administration of President Donald Trump earlier in 2018.
Land O’Lakes, Inc. is the first organization to sponsor a self-insured multistate group health plan under new Association Health Plan (AHP) regulations that were issued this past summer,” a press release issued by the company in November states. “This self-insured arrangement now offers coverage to farmers of participating co-ops and individual dairy farmers within the Land O’Lakes network in Minnesota and now, Nebraska.”
Rules ‘Level the Playing Field’
The new rules governing AHPs reverse Obama-era regulations that favored large companies, says Jordan Roberts, a health care policy analyst at the John Locke Foundation.
“The Affordable Care Act gave large businesses an unfair regulatory advantage at the expense of small businesses,” Roberts said. “Large-group plans are exempt from many of the requirements that are placed on small-group and individual plans. The new rule will level the playing field to allow small businesses and self-employed owners the advantages that come from banding together in a large group to spread risk.”
Allowing groups to offer health care plans tailored to the unique needs of their members will help decrease health insurance costs, says Roberts.
“When small businesses and individuals can band together and receive the same regulatory treatment as large-employer groups, they have the freedom to offer their members coverage that better aligns with their needs, making the coverage much more affordable,” Roberts said.
‘AHPs Are Excellent’
AHPs can transform the health care landscape, says Justin Haskins, a research fellow at The Heartland Institute, which publishes Health Care News.
“Association health plans have the potential to be the most important health insurance innovation in decades, but only if the government gets out of the way and lets private associations offer these types of health care plans,” Haskins said. “AHPs are excellent because they allow groups of people who might otherwise have to buy health insurance as individuals purchase plans as part of much larger groups. Groups have a lot more power when negotiating prices with health insurers, and the larger the group, the more negotiating power the group has.”
Praises Trump’s Moves
The Trump administration has rolled back many of the regulations put in place by the Affordable Care Act (ACA) that limited people’s options to purchase affordable health care coverage, Roberts says.
“The Trump administration has taken meaningful steps to increase choices for Americans when it comes to how they get their health care coverage,” Roberts said. “The Affordable Care Act has failed in many ways to provide affordable health coverage for people, and they want relief. Expanding access to association health plans is an easy way to increase the choices and decrease costs for Americans struggling to buy health care coverage.”
Sees Revolutionary Potential
Haskins says the Trump administration and Congress can do even more to provide Americans with better options.
“The Trump administration’s rule change allowing small businesses to group together to form AHPs was a tremendous first step toward improving health insurance,” Haskins said. “But if Congress were to extend this right to all associations, then groups like the National Rifle Association, AAA, and even local churches and community organizations could offer health insurance for their members, too.”
Expanding the breadth of AHPs would increase the size of risk pools available and drive down costs for all members, Haskins says.
“Can you imagine how much power an association with millions of people would have when negotiating premiums and deductibles?” Haskins said. “It would revolutionize the U.S. health insurance system. And even more importantly, associations offering AHPs are required to offer health insurance at the same rate for all members, regardless of preexisting conditions, helping those people gain access to more affordable health coverage.”
Cites Service Experience
These associations have a long history of providing services to their members in an efficient way Haskins says.
“Most of the associations that would offer these plans directly to their members have been established for years and provide many other services to their members,” Haskins said. “Adding health benefits to the list of services shouldn’t pose a problem for these organizations.”
Haskins says granting AHPs greater flexibility does not necessarily mean the plans will fail to offer comprehensive coverage.
“The Land O’Lakes plans are not going to provide ‘skimpy coverage,’ as some on the Left have feared,” Haskins said. “They will provide plans that offer all the essential health benefits that the ACA mandates, and they won’t reject people with preexisting conditions.”
More to Come?
Haskins says the Land O’Lakes announcement will likely be followed by more groups offering similar plans.
“It’s great that Land O’Lakes is leading the way in offering association health plans to its members,” Haskins said. “I applaud the company for providing the necessary protections for those who need it most, and I expect many more business associations will soon follow in Land O’Lakes’ footsteps.”
Chris Talgo is senior editor at The Heartland Institute and a research fellow for Heartland’s Socialism Research Center.
