Conservative health care consultant Chris Jacobs, founder of Juniper Research Group, called the rule a "'kludgy' work-around" of the regulatory structure imposed on the small-group and individual market by the 2010 health care law. The rule serves only federal regulators, not the states, he argued.
"Congress can -- and should -- do far better, by repealing the regulatory regime outright, and returning control of health insurance markets where it belongs: To the states," Jacobs wrote in The Federalist.
Democrats and consumer groups slammed the rule, saying it threatens a return of "junk insurance" that would create an uneven playing field with plans regulated in the small-group and individual markets. While the rule would prevent association plans from denying people coverage or charging more for certain health conditions, they would not have to offer the 10 essential health care benefits mandated by the 2010 health care law. That could lead to skimpy plans that attract only healthy people, critics say.
America's Health Insurance Plans, the industry trade group, expressed concern that the rule would erode protections and affordable coverage in both the small-business and individual markets. The group signed a letter urging state regulators to increase protections following Trump's executive order.
The Trump administration acknowledged that while it has good intentions, it will be hard to predict the effects of the rule. The Labor Department even cited the individual mandate as a backstop against the potentially negative effects.
"All else equal, individual markets may be more susceptible to risk selection than small group markets, as individuals' costs generally vary more widely than small groups'," the administration wrote. "The ACA's requirement that essentially all individuals acquire coverage and the provision of subsidies in Exchanges may reduce that susceptibility, however."
But Congress effectively repealed that mandate last month as part of the tax overhaul.
The overall impact of the rule could be negligible either way, considering the relatively small number of affected people, the limitations in establishing the plans and their uncertain future under the next administration. Insurance companies might not be interested in selling the plans if they don't offer a stable business opportunity.
"Can insurers really count on this in the long term?" said Joe Antos, a scholar with the American Enterprise Institute. "Or is this going to be another thing that's going to come and go?"
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