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Press release
June 19, 2018

Trump Administration Clears Way for Sale of Junk Insurance, Reverting to Old Insurance Tricks that Can Financially Devastate Families

Washington, D.C.— Today, the Trump administration released a final rule that clears the way for an unprecedented expansion of so-called “Association Health Plans,” which are exempt from critical insurance safeguards. Moreover, many association health plans likely will pursue strategies that are carefully designed to keep people with preexisting conditions from buying policies. The sale of these substandard plans is also expected to cause a rise in health care premiums for people buying standard coverage through the individual marketplace. View Families USA’s analysis of the rule when it was proposed here: http://familiesusa.org/product/association-health-plan-rule-would-make-it-easier-sell-junk-insurance.

Following is the statement of Families USA’s Executive Director Frederick Isasi:

“With the announcement of today’s final rule, the Trump administration continues to undercut financial protections for families. The president was elected on a promise to provide higher quality and more affordable coverage. This new change in federal regulation unleashes on families the games that insurance companies used to play. It will allow insurers to discriminate against people who have been sick or are sick—driving up their costs and exposing them to terrible financial expenses. Do we really want to return the nation to a time when over half of all bankruptcies of hard-working families was from medical debt?

“Because association health plans might appear like regular insurance but typically offer narrow coverage, many consumers who buy them will discover that they have astronomically high medical bills for charges they assumed would be covered by their health insurance. For example, what will happen when parents realize their daughter needs to go to the hospital and their health insurance offers no coverage for life-saving care? They lose everything they have worked for to save their daughter’s life. That’s not the promise that the president made during the campaign. 

“We expect this new federal law will spark a rise in both insurers refusing to pay medical bills and medical bankruptcies, both of which have fallen since 2010 when the health law went into effect. When the people who are tricked into buying these cheap, junk plans need their health insurance to cover their medical care, they’ll realize they’ve been swindled out of their money with no comprehensive health coverage to show for it.

“Association health plans are also difficult for regulators to oversee and protect consumers against. As a result, this final rule also is likely to pave the way for unscrupulous insurance companies to target small businesses, the self-employed, and freelancers by selling them very low-cost health plans that actually will not cover their medical claims. Moreover, even legitimate association plans, who follow the letter of these new rules, will weaken important consumer protections by offering junk plans that don’t cover many essential health benefits or charge discriminatory prices. 

“We are disappointed that the Trump administration is once again attacking the very consumer protections that ensure the availability of comprehensive, affordable insurance for every family in our nation. Rather than making it easier for insurance companies to again prey on consumers and charge more to people with chronic health conditions, the administration should focus on keeping its promises to lower costs and improve the quality of health care.

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