A group of bakeries, for example, might form a bakers association and purchase health coverage together.
The most famous examples have been farm bureaus, which allowed independent farming businesses to band together and get insurance.
That kind of coverage is totally free from the health care law’s insurance regulations: the mandate to cover essential health benefits, the prohibition on charging sick people more than healthy people or denying people coverage based on their medical history, and so on.
“The ability for individuals to purchase health insurance through an association really puts the individual market at risk and destabilizes it over the long term,” Lucia said.
“When you have market segmentation, it over time leads to higher premiums and it becomes less attractive to carriers.” Trump’s executive order would also expand what’s called short-term limited duration insurance.
Association health plans were treated as small businesses and were therefore required to cover all of the law’s mandated benefits.
Essential health benefits, mandating that insurers cover everything from hospital care to prescription drugs to maternity care, are central to the ACA’s insurance protections: They prevent plans from crafting their coverage to attract mostly young and healthy customers at the expense of older and sicker people, which had been one of the primary problems with the association health plan model before the law.
It would potentially allow individuals to join these plans too, which would put individual insurance marketplaces in serious peril by drawing younger and healthier people away from them.