The Trump Administration has picked up in 2018 where it left off in 2017 by dealing two more blows to the American health care system. The Department of Labor (DOL) on January 5th published a proposed rule which would expand the ability of groups of employers to create Association Health Plans (AHPs), while today the Centers for Medicare & Medicaid Services (CMS) sent a letter to state Medicaid directors indicating support for states to implement work requirements for “able-bodied” adult Medicaid beneficiaries. These moves threaten to restrict access to critical and comprehensive healthcare services for low-income Americans, even as the healthcare coverage of 9 million American children hangs in the balance as Congress continues to drag its feet on a long-term re-authorization of the Children’s Health Insurance Program (visit ANA’s CHIP action page here).
Association Health Plans
As I wrote in a blog post in October, AHPs currently exist and are used primarily by small businesses to purchase group health coverage, but are regulated under the provisions of the Affordable Care Act (ACA) in the same way as coverage purchased on the individual health insurance market. DOL’s proposed rule seeks to make it easier for employers to create AHPs by: 1) allowing AHPs to exist for the sole purpose of offering healthcare coverage and 2) broadening the definition of “commonality of interest” to allow for larger AHPs. This would in effect treat AHPs as large group health insurance plans and allow coverage under AHPs to be sold across state lines under certain circumstances.
Expanding the use of AHPs in this way exempts them from important provisions covered under the ACA. As a reminder, the ACA includes provisions on insurance plans sold on the individual market which:
- Require plans to cover 10 Essential Health Benefits including reproductive and maternal health services and preventive services;
- Forbid insurers from charging more to individuals due to pre-existing conditions;
- Limit the amount insurance companies can charge to older individuals based on age.
While DOL notes that a non-discrimination provision within the proposed rule would prevent denying coverage on the basis of pre-existing conditions, AHPs could still select for younger, healthier individuals in other ways and could still charge higher premiums for older individuals, potentially leaving these individuals (who are statistically likely to be sicker) without a coverage option.
Furthermore, these insurance plans are ripe for instances of fraud, abuse, and insolvency. The Government Accountability Office (GAO) in 1992 issued a report which slammed similar small business insurance arrangements and noted that they left hundreds of thousands of enrollees with millions of dollars in unpaid claims, while widely failing to meet state insurance laws and regulations. The GAO report found that some plans tried to duck state insurance regulations entirely. This type of Wild West approach to insurance coverage does not offer the comprehensive level of coverage at a low price that the Trump administration claims. Based on the provisions of this proposed rule, we also expect several lawsuits to challenge this based on the legality under current federal law and on the insurance across state lines aspect.
Work Requirements for Able-Bodied Adult Medicaid Beneficiaries
CMS sent a letter on January 11th to state Medicaid directors announcing its support for states to implement waivers introducing work requirements for non-elderly, non-pregnant adult beneficiaries who are eligible for Medicaid on a basis other than disability. CMS bases its support for work requirements on what it describes as the health benefits of community engagement, including work and work promotion.
This latest attempt by the Trump Administration to restrict Medicaid eligibility is, however, nothing more than a straw man argument. Medicaid expansion ipso facto provides healthcare coverage to working, low-income Americans. According to a December 2017 Kaiser Family Foundation issue brief, roughly 6 in 10 of the 22 million non-disabled adults receiving Medicaid benefits are employed either full- or part-time, while 8 in10 of these adults live in a working family. Most of these individuals work either for small firms or in low-paying industries which do not offer healthcare coverage and thus rely on Medicaid for such.
Further, among those adults who are not working, most report a major barrier to employment such as illness, disability, or care-giving duties. According to the same Kaiser issue brief, Medicaid expansion has not negatively impacted labor market participation; in fact, some research demonstrates that Medicaid coverage supports work.
As such, Medicaid work requirements would likely have little to no positive impact on employment and could even negatively impact both access to healthcare and employment prospects for these Medicaid beneficiaries. From an empirical standpoint, the basis for imposing work requirements on Medicaid beneficiaries seems to stem less from a desire to assist low-income Americans to access critical healthcare services while simultaneously supporting employment, but rather from a preconceived notion as to the characteristics of the individuals who benefit from Medicaid.
The American Nurses Association opposes any action – legislative or executive – which threatens the ability of Americans to access and receive high quality healthcare. This is particularly true when it comes to the most vulnerable Americans. If 2017 showed us anything, it is that this administration is more concerned with scoring political points and reversing gains made in healthcare than it is about actually ensuring high quality healthcare coverage for all Americans; this seems to be the modus operandi in 2018 as well.
We urge the Administration and Congress to work toward finalizing a long-term Children’s Health Insurance Program (CHIP) re-authorization, toward a market stabilization package including cost-sharing reduction payment funding, and toward strengthening the existing healthcare system – which has resulted in coverage for tens of millions more Americans since 2014 – and put an end to these attempts to sabotage Americans’ healthcare for political gain. ANA is committed to working with Congress and the Administration on legislation and regulations which align with our four core principles of health system transformation. These moves, however, represent a major step backward from achieving those principles.