Experience with ACA Suggests Association Health Plans Could Harm the Small-Group Insurance Market
A recent federal rule has paved the way for many more small firms and self-employed individuals to purchase insurance through association health plans, which are not subject to preexisting-condition protections and other Affordable Care Act (ACA) market regulations. Experts worry that by drawing away healthier people, plans operating under the new rule could increase prices by more than 10 percent for those who need more-comprehensive coverage or don’t qualify for association health plans.
To estimate the potential impact of these health plans, Wake Forest University’s Mark A. Hall and Virginia Commonwealth University’s Michael J. McCue analyzed for To the Point how “market segmentation” has functioned in the small-group market to date. Even before the new rule expanded association health plans, small firms could avoid ACA regulations by self-insuring or holding onto transitional plans that predate the ACA, they say.
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