Sen. Alexander, Sec. Acosta in Knoxville: Administration Plan Could Give Thousands More Tennesseans Access to Lower Cost Employer Insurance

Posted on June 22, 2018


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KNOXVILLE, Tenn., June 22 — U.S. Senate health and labor committee Chairman Lamar Alexander (R-Tenn.) and U.S. Labor Secretary Alexander Acosta today said that a new Trump Administration initiative announced this week could allow a self-employed Tennessee plumber or farmer or an employee of a small business to buy lower cost employer health insurance that will include the same protections, such as coverage for pre-existing conditions, that employees of large companies have. The new plans can become effective as early as September 1, and they are created within existing law and do not have to be approved by Congress. 

“To the plumber in Memphis, the songwriter in Nashville, or the bakery owner in Knoxville, who have been paying through the nose since Obamacare took effect, the Trump Administration appears to have found a potential solution for affordable insurance,” Alexander said.“Nearly 180 million Americans get their insurance on the job, and generally they are happy with it because premiums are several thousands of dollars lower a year, and their policies include patient protections such as coverage of pre-existing conditions. On Tuesday, the administration released a plan that would offer this same sort of lower cost health insurance to self-employed Americans and to more employees of small businesses. This new rule is projected to provide more affordable health insurance coverage to 4 million Americans nationwide by 2023, including 400,000 who otherwise would lack insurance, according to the Congressional Budget Office.” 

Alexander was in Knoxville today with Labor Secretary Alexander Acosta and Tennessee’s Insurance Commissioner Julie McPeak to discuss the association health plan rule the administration released Tuesday. Several members of the Tennessee business community also talked about how they would benefit from the new rule.

Alexander continued, “This new association health plan rule could help two groups of people who have been particularly hurt by Obamacare: First, the self-employed. For example, this rule could allow that plumber making $60,000 and paying $20,000 in insurance in the individual market, to instead join with other plumbers to purchase health insurance at lower costs. Second, employees of small businesses. The rule will allow small businesses in the same line of work or in the same geographic area to join together and offer insurance to their employees. For example, a bakery and a sporting goods store in Knoxville could come together and purchase a plan for their employees.”

“I want to thank Senator Alexander for hosting me in Tennessee,” Secretary Acosta said.  “Visiting with small businesses in Knoxville today reinforced the importance of Association Health Plans.  I want to again thank Senator Alexander for his leadership and support on this important issue that will bring millions of Americans more affordable health coverage options.”

Background on the rule:

·          The Department of Labor’s rule will make the option of employer insurance available to more Americans by:

    o    Allowing businesses to form an AHP on the basis of common geography or industry.

    o    Allowing self-employed people to join and form AHPs.

·         This will make it easier for small businesses to offer health insurance. Health coverage by small employers has been on the decline: in 2000, 47% of small firms offered health coverage. In 2016, just 29% offered coverage. 

·         The Congressional Budget Office estimates that an additional 4 million people will be covered by AHPs in 2023 and later years.

·         Premiums in AHPs are projected to be between $1,900 to $4,100 lower than the yearly premiums in the small group market, and $8,700 to $10,800 lower than the yearly premiums in the individual market by 2022. This will provide much needed relief for Americans stuck in the Affordable Care Act exchanges who have seen their premiums go up by more than 105% since the exchanges opened.

·         This could help Americans who have been trapped or shut out by the Affordable Care Act’s broken system:

    o    15 million working Americans and their families do not have health coverage.

    o    9 million Americans purchase coverage in the individual market without a subsidy.

Alexander concluded: “Many people have had no attractive option under Obamacare – there are 15 million Americans who are self-employed or work for a small business today that are uninsured, often because it is too expensive. The Administration’s new association health plans will provide small businesses and self-employed Americans with the same opportunities, cost advantages, and coverage protections that employees of large companies enjoy today. These coverage protections 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. I commend President Trump and Secretary Acosta for responding to the health insurance needs of America’s self-employed entrepreneurs and small business employees, and I look forward to seeing the rule’s positive effects in Tennessee and across the nation.”