Recently, the Trump Administration proposed new rules intended to make it easier for small businesses to offer health benefits. The rules allow small business owners, their employees, sole proprietors, and other self-employed people to join together as a single group to buy insurance in the large-group market. These new rules, however, skirt around previous regulations put in place by the Affordable Care Act.
After issuing these rules, the Labor Department asserted that as many as 11 million Americans “could find coverage under this proposal.” There are other suggested benefits for the adoption of this plan. Large groups of policyholders can spread out administrative costs over more people and may have increased negotiating power with health care providers. Also, there are fewer necessary benefits for large plans, which means costs will be cut.
On the other hand, critics of the plan are saying these rules will cause a serious divide in the healthcare market when younger, healthier groups who don’t need extravagant healthcare plans opt for cheaper programs, driving up premiums for older and sicker groups. When costs fall for one group, they tend to rise for another.
Providers are also free to ignore the “essential health benefits” like mental health care, emergency services, maternity and newborn care, and prescription drugs. While many groups will be smart enough to ensure a reasonable set of benefits, others may not be so lucky.
In response to these criticisms, the Labor Department contested, “joining together employers may reduce administrative costs through economies of scale, strengthen their bargaining position to obtain more favorable deals, enhance their ability to self-insure and offer a wider array of insurance options.”
Many health professionals aren’t accepting that response. “Those with serious health conditions like cancer would be left paying ever-increasing premiums for comprehensive coverage,” said Chris Hansen, the president of the American Cancer Society Cancer Action Network.
It’s hard to tell for sure whether these rules will help or hurt small businesses. As more employers adopt health plans that utilize the new rules, we’ll get a better idea of the exact ramifications the rules have on the healthcare industry as a whole.