According to Politico:
“[The] Trump administration announced plans to make it easier for small businesses and trade groups to band together to purchase health coverage outside of the law’s insurance markets. [The administration, in a major change to how association health plans have operated, has proposed allowing self-employed individuals to enroll in them.]
President Donald Trump touted the expansion of so-called association health plans, which offer fewer consumer protections than Obamacare coverage, as a much-needed cheaper alternative. But critics have warned that the latest move will further drive up Obamacare premiums and weaken the law.
Critics warn the steps will further destabilize wobbly Obamacare markets by siphoning off younger and healthier customers, who are more likely to favor cheaper plans that cover less.
Supporters of the Affordable Care Act also worry that the law’s consumer protections will be eroded under the new rules, since insurers will be allowed to offer skinnier coverage that doesn’t include costly benefits like mental health treatment and prescription drug coverage. Customers might not be aware of coverage gaps until they require significant medical care and could be left with big, unexpected bills.
Administration officials said the final proposal contains consumer protections, including prohibitions on discrimination against customers with expensive medical conditions. That could reassure critics but may limit the ability of the plans to hold down costs.
The new regulations are likely to spark a legal challenge on the grounds that they violate federal labor law and need approval from Congress. Insurance regulators, particularly in states that have embraced Obamacare, are also likely to push back against the changes.”
An article by Political Pro shows that expectations for a legal challenge were well founded given two states announcements of plans to sue the Administration:
“Attorneys general from New York and Massachusetts announced today they will sue the Trump administration over new rules expanding the availability of association health plans.
Some states, including New York, believe the new rules do not preempt state authority to regulate association plans within their borders. However, they are concerned that these plans could be sold across state lines and weaken their individual insurance markets.
The states have not yet filed their complaint.”