President Trump has tweeted that he may issue an Executive Order that could undermine Obamacare by using Association Health Plans. The head of an organization that offers them now has some concerns.
The Council of Small Enterprises or COSE has been offering group insurance plans to small businesses for decades. There was less need under the Affordable Care Act but COSE still offers a multi-employer plan regulated by the state of Ohio.
Trump said under his plan consumers could purchase insurance across state lines and but COSE president Steve Millard says that could lead to far less coverage.
“If you did say you can get insurance from any state that you want, you basically go out and pick the state with the least amount of regulation, the least amount of rules and the best situation for your own insurance.
"So would that be good for individual users? Potentially, but on the flip side you end up driving all that business to places that regulated in ways you’re not clear about and you might not be sure about protections that you have.”
Supporters of the Trump plan say it would lower premiums through competition.
Speculation is that the Trump plan would bypass Obamacare regulations like covering preexisting conditions or pregnancies. Trump plan also could lead healthy groups to form an association leaving much higher premiums for the sick and the weak.
“Let’s say the aerobics instructors of America decide to create a plan,” says Millard. “So everybody healthy goes to their plan. It leaves all the Twinkie eaters someplace else. So that basically creates a situation where you’re pooling the risk in one place and the bad risk is flowing someplace else.
"Somebody has to underwrite that bad risk and in the system we have right now it will be the ACA, which may or may not play to some folks’ desire here.”
The President is expected to announce details of his plan this week.