Alexander: Trump Administration Plan Would Give Potentially Millions More Americans Access to Lower Cost Employer Insurance

“To the plumber in Memphis, the songwriter in Nashville, or the bakery owner in Chattanooga, who have been paying through the nose since Obamacare took effect, who might be making $60,000 dollars per year and paying $20,000 for health insurance and who is very likely not receiving a subsidy, the Trump Administration appears to have found a potential solution.” 

WASHINGTON, June 19, 2018 — Senate health and labor committee Chairman Lamar Alexander (R-Tenn.) today said a new Trump Administration initiative could allow a self-employed Tennessee plumber or farmer or employee of a small business to buy lower cost employer health insurance that will include the same protections, such as coverage for pre-existing conditions, that employees of large companies have.

“To the plumber in Memphis, the songwriter in Nashville, or the bakery owner in Chattanooga, who have been paying through the nose since Obamacare took effect, who might be making $60,000 per year and paying $20,000 for health insurance and who is very likely not receiving any subsidy, the Trump Administration appears to have found a potential solution within existing law for affordable insurance,” Alexander said. “Nearly 180 million Americans get their insurance on the job, and generally they are happy with it because favorable tax code treatment saves them several thousands of dollars a year, and their policies include patient protections such as coverage of pre-existing conditions. The administration’s plan would offer this same sort of lower cost health insurance to self-employed Americans and to more employees of small businesses.”

Alexander continued, “This new association health plan rule could help two groups of people who have been particularly hurt by Obamacare: First, the self-employed. For example, this rule could allow that plumber making $60,000 and paying $20,000 in insurance in the individual market, to instead join with other plumbers to purchase health insurance at lower costs. Second, employees of small businesses. The rule will allow small businesses in the same line of work or in the same geographic area to join together and offer insurance to their employees. For example, bakeries and small sporting goods stores in Chattanooga could come together and purchase a plan for their employees.”

“I am thankful for the leadership of Senator Alexander and for his support of the Association Health Plan rule,” U.S. Secretary of Labor Alexander Acosta said. “By helping to level the playing field between large companies and small businesses through Association Health Plans, we are providing affordable health coverage options to millions of American families.”

Background on the rule:

•  The Department of Labor’s rule will make the option of employer insurance available to more Americans by:
  • Allowing businesses to form an AHP on the basis of common geography or industry.
  • Allowing self-employed people to join and form AHPs.
  • This will make it easier for small businesses to offer health insurance. Health coverage by small employers has been on the decline: in 2000, 47% of small firms offered health insurance. In 2016, just 29% offered coverage.
  • The Congressional Budget Office estimates that 4 million people will be covered by AHPs in 2023 and later years.
  • Premiums in AHPs are projected to be between $1,900 to $4,100 lower than the yearly premiums in the small group market, and $8,700 to $10,800 lower than the yearly premiums in the individual market by 2022. This will provide much needed relief for Americans stuck in the Affordable Care Act exchanges who have seen their premiums go up by more than 105% since the exchanges opened.
  • This could help Americans who have been trapped or shut out by the Affordable Care Act’s broken system:
    • 15 million working Americans and their families do not have health coverage.
    • 9 million Americans purchase coverage in the individual market without a subsidy.

Alexander concluded: “The Administration’s new association health plans will provide small businesses and self-employed Americans with the same opportunities, cost advantages, and coverage protections that employees of large companies enjoy today. These coverage protections include prohibitions against charging more or denying coverage because of a pre-existing condition, cancelling plans because you get sick, and annual or lifetime limits on benefit coverage. Coverage protections also include the requirement to offer coverage to dependent children up to age 26 and the requirement to provide preventive health coverage free of charge to the patient. I commend President Trump and Secretary Acosta for responding to the health care needs of America’s self-employed entrepreneurs and small businesses, and I look forward to seeing the rule’s positive effects in Tennessee and across the nation.”

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