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 The rule, put forward by the Department of Labor, would allow
individuals and small businesses to form an association based on
geography or industry and purchase health insurance that would be
exempt from some rules of the Affordable Care Act.
The rule also allows sole proprietors to join such associations.
Currently, sole proprietors can purchase individual insurance
through the Obamacare individual market, created under former
Democratic President Barack Obama's healthcare law.
The rule must go through a comment period but is likely to gain
approval, helping to enact an executive order Republican President
Donald Trump signed in October.
Under Obamacare, all health insurance plans must cover a set of 10
essential health benefits, such as maternity and newborn care,
addiction and mental health treatment and prescription drugs. The
proposed rule would allow small business associations to purchase
health plans that do not necessarily cover all of these benefits,
which proponents say would help lower premiums.
The rule does not allow Small Business Health Plans to charge those
with pre-existing conditions more or exclude employees because of
their health.
Proponents of Obamacare say the rule would undermine the individual
insurance market created under the law by allowing young and healthy
people to purchase cheaper insurance, leaving the sickest and most
expensive patients in the Obamacare markets, driving up costs.
Hospitals, insurers and medical groups criticized the rule in
December and said it would make health insurance unaffordable for
people with pre-existing conditions.
The rule could destabilize several states' individual insurance
markets because healthier people could access cheaper insurance,
said Evercore ISI analyst Michael Newshel, adding that it is still
unclear whether significant numbers of people will opt for the
slimmer plans.
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Republicans, who have unified control of government, have repeatedly
failed to repeal and replace Obamacare, a top 2016 presidential
campaign promise of Trump. Instead, the administration has sought to
dismantle the law through administrative rules and executive orders.
Republicans dealt their biggest blow to the healthcare program in
their tax overhaul, which Trump signed into law last month. The law
in 2019 repeals the individual mandate, the requirement that most
Americans purchase health insurance or else pay a fine. Health
policy experts say the mandate helps ensure a viable market.
Several business groups, including the National Restaurant
Association and the National Retail Federation, on Thursday praised
the proposed rule, saying it would enable millions of people to
obtain more affordable health insurance.
But Democrats and medical advocacy groups blasted the rule, saying
it put affordable health insurance further out of reach for many
Americans, including those with pre-existing conditions.
"The Trump administration has declared open season for fraudsters
selling junk insurance while those with pre-existing conditions will
find healthcare further and further out of reach," Democratic
Senator Ron Wyden said.
(Reporting By Yasmeen Abutaleb; Editing by Andrew Hay and Jonathan
Oatis)
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