NC GOP's "Association Health Plans" are dangerous boondoggles

The Republican Party, recycling bad ideas for decades:

Imagine small businesses being able to provide a comprehensive health insurance package to their employees on par with any fortune 500 company. While that may sound like a fantasy, we made that one step closer to reality with the Small Business Health Care Act.

Association Health Plans are not a new idea. In fact, they have existed for decades and are permitted under current law for certain types of employer groups. But because of the Obama administration’s efforts to prop up Obamacare’s small group and individual markets, most Association Health Plans were effectively dismantled in 2011.

It is a fantasy, and tightening regulations had nothing to do with "propping up" Obamacare, and everything to do with stabilizing health care markets and shielding people from rampant bankruptcies:

A key to sustainability of health insurance markets is that health plans competing to enroll the same participants must operate under the same rules. Although AHPs would be offered in competition with other small group and individual market plans, they could operate under different rules. In particular, if an AHP is allowed to follow the issue, rating, and benefit rules of a single state nationwide, or be pre-empted from state regulation by being self-insured, it would impose different rules on insurance providers offering coverage in the same market. The viability of many state-based markets would be challenged as a result.

Governmental authority for regulating AHPs would need to be clearly defined. Absent this clarification, it is likely that no entity will bear the sole responsibility for regulating AHPs, or that there will be conflicting regulation. The history of multiple employer welfare arrangements (MEWAs) is instructive. Self-funded MEWAs had no clear regulatory authority, as initially it appeared that ERISA exempted them from state-level regulatory oversight. Multiple MEWA bankruptcies resulted, and consumers had limited avenue for redress. Eventually, the federal government issued a written clarification of earlier amendments to ERISA that made it clear that states do have regulatory authority over MEWAs. If regulatory authority for AHPs is not clearly specified, they could suffer the same fate as MEWAs, leaving millions without health coverage due to insolvencies. Surplus requirements for self-funded AHPs should be similar to the minimum requirements for health risk-based capital developed by the National Association of Insurance Commissioners.

I've read the bill in question several times, and there is no regulating authority referenced, aside from the qualifications and restrictions listed in the bill itself. And the fact the bill holds conflicting directives on the establishment of the associations is deeply troubling. The Association must have been formed for reasons other than insurance coverage, but the bill cuts the amount of time the Association has to have been in operation from five years to two. In other words, Republicans are hoping for new associations to be formed to take advantage of the insurance provisions, even though that is barred by the same (future) law.

You generally only get a mess like this when your goal is something else entirely. In this case, it's just another attack on Obamacare.

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