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Capitol Correspondence - 07.23.18

Association Health Plans Raising State Concerns Their Ability to Regulate

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According to PoliticoPro:

States are struggling to understand how aggressively they can oversee the growth of health insurance policies from small businesses and independent contractors trying to band together to skirt Obamacare rules.

Most regulators — even in states that are enthusiastic about the Trump administration’s expansion of association health plans as an alternative to the Affordable Care Act — believe they’ll retain significant authority to determine what kinds of insurance is sold in their states and what financial rules insurers must follow. Yet some officials are wary about a potential erosion of their Obamacare insurance markets or the plans’ prior history of being rife with insolvency problems and abuse.

State regulators are particularly concerned about regulating plans offered in multiple states by an insurer that isn’t based in their territory. They fear a race-to-the-bottom scenario if companies are able to pick and choose which state rules to follow.


One of the largest worries states have is making sure that insurers offering association health plans have enough money to cover the medical claims of their customers. They also want to be able to thwart companies that are selling shoddy or misleading products.

The White House is pitching the expansion of association health plans as an important tool to drive down costs and expand options for small businesses and self-employed workers. Throughout the 2016 presidential campaign, Donald Trump repeatedly cited allowing plans to be sold across state lines as a top health policy priority. But stringent state regulations could limit the popularity and drive up the cost of the new products.”

In addition to the logistical challenges mentioned about for association health plans, the plans are encountering some political difficulties as key supporters are finding the Administration’s proposal unsatisfactory.

ANCOR has been following this issue due to its potential applicability to state association members and will continue to report new developments.