Editor’s note: This commentary is by Michael Fisher, who is the head of the Vermont Office of the Health Care Advocate.
[V]ermont needs to act now to protect Vermonters from a harmful Trump administration policy that will destabilize the health insurance market and increase health insurance prices for many. This month, Vermont’s Department of Financial Regulation began approving new association health plans to be sold in the state in 2019. These plans stem from the Trump administration’s efforts to undermine the Affordable Care Act.
The new association health plans will undermine the stability of the marketplace by luring healthier populations out of the shared individual and small group risk pool. A larger pool is more stable and affordable for ratepayers. As healthier populations leave the marketplace, premium prices will increase for those remaining in the individual and small group risk pool. When Vermont reorganized its insurance pool in 2012, it closed the existing association marketplace and combined the small group and individual markets to create a larger and more stable risk pool.
In June, the Trump administration released rule changes for association health plans. Under the new rule, states have the option to allow small employers to purchase association health plans outside of the ACA marketplace. Vermont’s Department of Financial Regulation has responded by implementing an emergency association health plan rule (now proposed as a final rule) that fragments the marketplace by allowing healthier small groups to leave the individual and small group risk pool for lower premium prices.
In reaction to DFR’s new association health plans rule, members of the business community and Blue Cross Blue Shield of Vermont have been scrambling to get their associations up and running for 2019. They are doing their best to start this line of business before the Legislature has an opportunity to consider the impacts of their actions on the Vermont marketplace. This is an obvious tactic to make it harder for Vermont policymakers to take necessary actions in the public interest.
Other states are protecting their marketplaces by continuing to require association health plans to be rated with the ACA risk pool. If Vermont does not take similar action to stop implementation of this destructive Trump administration policy, premium prices will climb faster than ever and many more Vermonters will be priced out of the health insurance market.
The Office of the Health Care Advocate will push for legislation this session to continue the practice of rating small groups in the individual and small group merged risk pool, even if they have joined together in a fully insured association. We expect significant opposition to this proposal from insurers and businesses who are prioritizing their own potential revenue and cost savings over the greater good. We urge policymakers to take action to promote a stable risk pool and affordable health insurance market.
