State Attorneys General Sue to Stop Association Health Plans

Published September 12, 2018

AHPs allow small businesses and self-employed workers to band together and purchase health insurance plans across state lines.

Expanding Access

The U.S. Department of Labor in June issued a rule change substantially increasing access to AHPs and establishing patient protections. Among the latter, insurers may not discriminate or deny coverage based on preexisting conditions, charge different premiums based on a person’s health status, or drop coverage when a consumer falls ill.

The rule change is good for consumers, says U.S. Secretary of Labor Alexander Acosta.

“President Trump is expanding affordable health coverage options for America’s small businesses and their employees,” Acosta said in an official release about the rule change. “Many of our laws make healthcare coverage more expensive for small businesses than large companies. Association health plans are about more choice, more access, and more coverage.”

Fighting for Obamacare

New York Attorney General Barbara D. Underwood and Massachusetts Attorney General Maura Healey filed a joint lawsuit in the U.S. District Court for the District of Columbia in July, along with attorneys general for California, Delaware, the District of Columbia, Kentucky, Maryland, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.

“The Trump administration’s AHP Rule is nothing more than an unlawful end run around the consumer protections enshrined in the Affordable Care Act—part of President Trump’s continued efforts to sabotage our health care system,” Underwood said in a statement about the filing. “Our lawsuit today seeks to safeguard federal protections under the ACA that help guarantee access to quality, affordable health care.”

The attorneys general argue the new rule violates the Administrative Procedures Act, the ACA, and the Employment Retirement Income Security Act (ERISA), urging the court to vacate the AHP rule.

‘Big Government Busybodies’

Chris Rochester, director of communications at The John K. MacIver Institute for Public Policy, says Obamacare has been causing premiums to spiral out of control, putting health insurance coverage out of reach for many Americans.

“Let’s be clear: what these AGs are suing over is the expansion of choice in the health insurance marketplace,” Rochester said. “That makes a sad kind of sense because Obamacare was premised on limiting choice and forcing people into plans they don’t want. It’s just another example of big government busybodies who think average Americans can’t be trusted to make their own health care decisions.

“If health plans were cars, the Obamacare cheerleaders like these attorneys general would like to force every American to buy a Rolls Royce with all the options, whether or not they can afford it,” Rochester said. “Expanding consumer choice simply allows people to buy a Toyota Corolla if that’s what they want or what they can afford.”

Rochester says policies that empower patients and their doctors and remove red tape so individuals are free to innovate can save the nation’s health insurance system.

“What the Trump administration has done is to expand choice,” Rochester said. “They are criticizing the president for ‘undermining’ Obamacare, and in a way they’re right. President Trump’s actions undermine Obamacare’s absurd restrictions on choice by expanding more affordable, short-term plans. Look no further than direct primary care as another powerful idea to dig us out of the health care disaster created by meddling politicians and smug bureaucrats.”