Proposed Association Health Plan Rule Could Split Insurance Market and Unravel Patient Protections

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Washington, D.C.—Today the American Cancer Society Cancer Action Network (ACS CAN) submitted comments to the Department of Labor regarding proposed changes to rules governing association health plans (AHPs). The comments detail several ways the proposed rule could divide the individual insurance market and significantly weaken patient protections leaving cancer patients and survivors with few meaningful or affordable coverage choices.

ACS CAN details how AHPs would be exempt from current benefit and cost-sharing requirements. Such plans could, for example, exclude coverage for prescription drugs or other essential health benefits, cap coverage based on number of hospital days or costs, and cover less than 60 percent of a patient’s medical costs. This would make the plans less expensive and more attractive to younger and healthier enrollees, but it would also leave them at risk for inadequate coverage while potentially forcing older and sicker patients to pay ever-increasing premiums for more meaningful insurance.

“The proposed rule could seriously erode the affordable comprehensive coverage now available in most states’ individual and small group markets that is so critical to cancer patients and survivors. These products could leave critical gaps in coverage and could require very high deductibles,” states the letter.

In addition, while the proposed rule prohibits AHPs from discriminating based on pre-existing conditions, it does allow such plans to impose different rates on groups based on the age, gender, group size and location of enrollees —changes that could have the same effect as considering someone’s health history. 

ACS CAN’s  letter explains, “An AHP seeking to achieve favorable selection would face few constraints on its ability to fashion and price products that attract the lowest-cost, lowest-risk enrollees. We are concerned that this provision provides a back-door way for such plans to use health status to determine premiums.

Other serious concerns include: no apparent solvency requirements to ensure plans are able to cover enrollees’ costly medical conditions, such as cancer; lack of clarity regarding state versus federal government oversight authority related to compliance and enforcement issues, potentially leaving consumers with little to no recourse should they have a coverage problem; and allowing large employers to join together and form an AHP, which could further segment the insurance market.

The comment letter notes these changes would be compounded by other proposals already in effect or being considered, including the elimination of the individual mandate and the extension and expansion of short-term policies. Taken together these changes are likely to divide and weaken the individual insurance market to the point where those with serious health problems, like cancer, will have few, if any, affordable health care choices.

Decreasing the number of uninsured in this country should be a priority. However, offering substandard products that won’t work for those diagnosed with cancer is not the solution. ACS CAN stands ready to work with the administration to review changes to the health care system that take into account patient needs and work to stabilize the health insurance market.

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