What’s the greatest feeling in the world? Many would say relief. When the doctor tells you the biopsy was benign, what do you feel? Relief. When the judge says “not guilty”, what do you feel? Relief. When you learn your lost child has been found alive and well, what do you feel? Relief. What a great feeling!
Now small business owners can experience the same feeling thanks to the Trump administration.
The Obama administration gave big business a big advantage when they allowed them to lower their health insurance costs through economies of scale and the large group market. But small businesses were left behind because they didn’t have enough employees to enjoy the same benefits.
These additional costs for small business have had devastating effects. As the cost of insurance for small business has increased, the percentage of small businesses offering healthcare coverage has declined.
The Trump administration announced recently that small business can form Association Health Plans (AHPs) to purchase health insurance and enjoy the same economies of scale that lower costs and diversify risks for big business. The new rule would allow industry groups across the country and local chambers of commerce to set up plans, which were previously disallowed by the Obama administration’s interpretation of the Employee Retirement Income Security Act (ERISA).
The Wall Street Journal editorial board says the left is complaining, arguing that these plans are junk insurance that will blow up ObamaCare. But these new AHPs are subject to the same ObamaCare rules such as pre-existing condition coverage and bans on lifetime limits. The plans also must abide by state regulations and benefit mandates, which could actually limit growth of these plans.
The AHPs are exempt from the federal mandate on essential health benefits so the left warns no one will cover maternity care. This is a false claim. The savings in these plans come mostly by lower administrative costs and larger risk pools, not skimpy benefits.
WSJ gives the real reason for panic on the left: “The real panic on the left is that many Americans may leave the ObamaCare exchanges for plans they prefer in price, quality or both. In other words, people might get better coverage.”
The Congressional Budget Office (CBO) says new AHPs will attract four million Americans, about 400,000 of whom are uninsured. That means more affordable and better coverage for people who might not otherwise have it. Who could be opposed to that?
WSJ sums the situation up well: “For once the test of a healthcare policy will depend less on government dictates than on the choices of millions of Americans.”