WASHINGTON -- Industry groups and policy experts are questioning a Trump administration proposal on health insurance even as it garners accolades from congressional Republicans.
The proposed rule, announced on Thursday, would loosen regulations under the Employee Retirement Income Security Act, or ERISA, that govern association health plans. Such plans allow businesses to band together in purchasing health insurance. Supporters say the rule is intended to help consumers hit the hardest by rising premiums under the 2010 health care law.
The Department of Labor is proposing to amend ERISA's definition of "commonality" to include geographic location. The change would allow different types of businesses located in the same area, including multistate metropolitan areas, to form associations. The proposal would also allow self-employed workers to purchase the plans.
"If made final, this rule should help up to 11 million hard-working Americans who don't have access to employer sponsored coverage and in addition provide new, more affordable options to Americans in the individual market who are getting hammered by skyrocketing premiums," Tennessee Sen. Lamar Alexander, chairman of the Health, Education, Labor and Pensions Committee, said in a statement.
The proposal follows President Donald Trump's October executive order directing the departments of Health and Human Services, Labor and Treasury to loosen rules governing association health plans.
The order also directed the agencies to expand short-term plans and health care reimbursement arrangements, which let businesses spend pre-tax dollars on employee health care costs. The administration has not yet released regulations on those two items.
Experts initially questioned how federal agencies would achieve Trump's goals without stretching statutory limits. But the proposed rule is "appropriately narrow," said Ed Haislmaier, a senior fellow with the conservative Heritage Foundation and a former Trump transition adviser.
But the rule further "muddies the waters" on state authority, said Katie Keith, a health care consultant and blogger at Health Affairs. "Clarity under ERISA, let alone its preemption standards, is already hard to come by," Keith wrote, and the rule would introduce additional complexities.
The issue seems to be a "moving target" for the administration, said Kevin Lucia, an association plan expert and research professor at the Georgetown University Center on Health Insurance Reforms.
"Any limitation on state authority to regulate associations in the future could be problematic for consumers and increase the risk of fraud and insolvencies of these arrangements," Lucia said.