Posted on June 22, 2018
President Trump and Labor Secretary Alexander Acosta this past week offered thousands of Tennesseans who are self-employed or who work at small businesses the opportunity to buy the same kind of lower cost health insurance with the same patient protections that roughly 160 million Americans get working for a larger employer.
The new rule will help these Tennesseans band together through “association health plans” to obtain the same kind of less expensive health insurance that employees of large companies, like Walmart or Amazon, can buy today.
Some 4 million Americans are expected to be insured under these plans by 2023, including 400,000 with would otherwise have no insurance, according to the Congressional Budget Office.
No surprise when the association plan premiums will cost as much as $11,000 less than Obamacare individual market plans by 2022, according to estimates by health consulting firm Avalere.
Tennesseans who work for themselves or who work for a small business owner have had the hardest time getting affordable insurance under Obamacare.
A self-employed Knoxville plumber making $60,000 a year might be charged $20,000 a year for health insurance. And small business owners throughout the state don’t have the same purchasing power as large employers.
Under President Trump’s rule — which can be implemented within existing law — small businesses of similar trades or geographies can join together and offer insurance to their employees. For example, bakeries and small sporting goods stores in Chattanooga could come together and purchase a plan for their employees.
Or a self-employed plumber can band together with other plumbers to purchase lower-cost insurance.
Today, about half of Americans get their health insurance on the job, where larger employers are able to bring down their employees’ premium costs just by the sheer volume of employees in their plans.
The Administration’s association health plans will give Tennesseans who are self-employed or employees of a small business a chance to get a similar bang for their buck because they’ll be buying health insurance for a larger group of people: They can spread administrative costs, allow employers to bargain together for better deals and create ways to bring more people into the market, which brings down costs for everyone.
These association health plans would be required to comply with the same patient protections as plans at larger companies like Walmart or Amazon, which include prohibitions against charging more or denying coverage because of a pre-existing condition, cancelling plans because you get sick, and annual or lifetime limits on benefit coverage.
Coverage protections also include the requirement to offer coverage to dependent children up to age 26 and the requirement to provide preventive health coverage free of charge to the patient.
This rule is needed because Obamacare has left thousands of Tennesseans without good options for health insurance.
The 150,000 Tennesseans who purchase health insurance in the individual market without a subsidy – because they don’t have insurance from an employer or from the government-- have seen their premiums skyrocket by more than 176 percent since 2013.
The association health plan rule has the potential to be a real solution for many Tennesseans, by giving them an option for insurance they can afford.
Lamar Alexander, R-Maryville, is Tennessee's senior U.S. senator.