President Trump is set to issue an executive order this week that calls for federal agencies to loosen costly health insurance regulations that are hurting the wallets of small businesses and individuals.
The executive order states that firms will be able to band together to form Association Health Plans (AHPs), or larger, self-insured risk pools. Under current federal protections, self-insured entities are freed from rules like community rating and health benefit mandates that make insurance not so affordable for everyone. They have the flexibility to be more creative in designing cost-effective yet comprehensive health plans that better serve the needs for their employees. Union County, a self-insured public employer located outside of Charlotte, is a leading example.
Lifting the ACA’s insurance market regulations on small businesses could indeed compel more firms to form viable AHPs. And because AHPs would take on a majority of the risk for all employee health care claims, they will have even more of an incentive to combat unnecessary health care costs.
