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Press release
January 4, 2018

Trump Administration Proposes Rule that Jeopardizes Health Insurance for People with Pre-existing Conditions and Older Adults while Destabilizing the Market

Washington, D.C. —The Trump administration today proposed a rule that would dramatically increase the number of people who are sold so-called “Association Health Plans” that are exempt from core insurance safeguards like covering any essential health benefits.

Following is the statement of Eliot Fishman, Families USA’s senior director of health policy:

“Under the rule by the Trump administration, junk health plans would compete against insurance that provides comprehensive benefits and abides by other safeguards protecting people who need and buy health care. This will endanger both those who are sold cheap, junk plans and the older adults and people with pre-existing conditions who get left behind. Couched in terms of serving small employers, the proposed rule’s extraordinarily broad definition of employers will let substandard plans flourish in a way that is clearly calculated to gut the ACA’s core insurance safeguards that are critically important to people with pre-existing conditions, like asthma, diabetes or even cancer.

“Before the Affordable Care Act, health insurers routinely discriminated against older people and those with pre-existing conditions. The ACA bans that discrimination, implementing safeguards that have received overwhelming support from the American people. Today’s proposed rule would take us backwards, creating again opportunities for insurance companies to sell millions of Americans health insurance in name only, free from any requirements to cover essential health benefits — prescription drugs, emergency services, mental health, hospitalization, maternity care and others — and allowing unlimited price discrimination based on age, residence in rural areas, and other factors associated with high health costs. These junk plans, immune from most state insurance department oversight, will destabilize insurance markets. Both the individual and the small-employer market will split in two: so-called ‘Association Health Plans’ will sell junk, cheap insurance to relatively young and healthy people, who will then find themselves denied coverage for essential care if they experience unexpected health costs; and other plans will provide an older, less healthy population with high-quality insurance that provides the full set of protections needed by people with health problems. This segregation will make premiums skyrocket in the more comprehensive market. Millions of people with pre-existing conditions and older adults who are covered through small companies or the individual market could ultimately lose access to the comprehensive insurance on which they now rely.

“The proposed rule itself concedes that these kinds of arrangements have repeatedly been abused in the past. But the rule’s proposed guardrails offer families no meaningful protections from the serious dangers created by Association Health Plans.

“This is just the latest step in the Trump administration’s sustained campaign to sabotage the Affordable Care Act. The Administration is attempting a back-door repeal of basic insurance protections that people with pre-existing conditions and other health problems are guaranteed by federal law. This rule would take us back to an era when health insurance was least available to the very people who needed it the most. Plain and simple, this rule knowingly and maliciously threatens access to essential health care for millions of hard-working families in America.”

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View our analysis of the rule.

Families USA, a leading national voice for health care consumers, is dedicated to the achievement of high-quality, affordable health care and improved health for all.