by Jordan Roberts
Director of Government Affairs, John Locke Foundation
Last week, a three-judge panel for the D.C. Circuit Court of Appeals heard arguments in ongoing litigation concerning a Trump administration rule, which expanded access to association health plans (AHP). North Carolina recently passed a bill that would allow North Carolinians to purchase these health plans, pending the appeals court decision. Both houses of the General Assembly passed the bill, but Governor Cooper did not sign the bill. After ten days of the bill sitting on his desk, it became law despite the Governor’s objection.
What’s at stake, in this case, is the freedom to choose a health plan that is more suited for an individual compared to what is offered by the Affordable Care Act (ACA). The Trump administration recognized that many Americans who don’t get their health insurance from work struggle to afford the plans that are offered through the ACA exchanges. AHPs give that group another choice for more affordable plans.
North Carolinians might have had the opportunity to purchase plans under this new law for next year if it weren’t for the twelve Democratic Attorneys general who brought this case to try to stop AHPs from going forward.
Health Affairs’ Katie Keith elaborates on some of the nuances of the arguments from the case:
The Trump administration appealed the lower court’s decision to the D.C. Circuit, which granted the government’s request for expedited appeal. Briefing was completed in August 2019, and the three-judge panel held a 45-minute hearing on November 14.
During oral argument, the federal government and the states reiterated their respective positions. The government argued that the final rule was within its authority to interpret the Employee Retirement Income Security Act (ERISA) and that the court should defer to its reasonable interpretation. The states argued that the Department’s interpretation was unreasonable under ERISA and violates provisions in the Affordable Care Act (ACA) related to the definition of individual, small group, and large group coverage. The panel seemed particularly interested in the intersection between ERISA and the ACA under the final rule, which agency is tasked with interpreting each statute, and the Department of Labor’s rationale for adopting the rule in the first place.
From here, the D.C. Circuit could reverse or affirm the lower court’s decision. Reversal would mean that invalidated portions of the final rule would be reinstated, and AHPs formed under the rule could resume marketing and enrollment of new members. If the D.C. Circuit affirms the lower court’s decision, much of the final rule would remain invalidated. In either instance, the losing party could ask for en banc review by a full panel of judges on the D.C. Circuit or ask the Supreme Court to hear their appeal.
For as much as Democrats decry Republicans for some supposed desire to take away people’s health care coverage, here we have a blatant example of Democrats doing exactly that. Here is an excerpt from a Politico morning health care newsletter in which a sponsor of an AHP describes the impact this case could have on his employees:
— Meanwhile: Newly formed AHPs may shutter by year’s end, when the Trump administration will have to start enforcing the lower court ruling. They don’t expect the U.S. Circuit Court of Appeals judges to reach a decision before the ACA open enrollment ends on Dec. 15, and their members need a guarantee of coverage.
“It’s a mess, it’s a shame,” said business owner Tom Zant of Michigan, who says his 34 mostly older employees will see a nearly 19 percent premium hike when they return to the state’s small group exchange from TranscendAHP, where about 5,000 people are covered through Blue Cross Blue Shield.
“They’re trying to strike down AHPs because it’s somehow undermining the ACA, but how does raising employees’ health care costs by 18.5 percent make health care more affordable?” Zant said.
One could reasonably take this case as a sign that Democrats care more about the ACA than the plight of real Americans who cannot afford the insurance products offer. What good is insurance if it takes the majority of your monthly income to keep and costs another small fortune to use? AHPs are meant to help these individuals and Democrats want to deny hard-working American’s this choice.
Hopefully, the appeals court will side with the administration and their interpretation of the law. While there seems to be no hope for meaningful health care reform in Congress, Democratic Attorneys General are going after one of the few pieces of health care reform to happen since 2016 that would offer competitive health plans to those who struggle to afford their current plan or who are currently uninsured. It doesn’t seem to me that a push to strike down the AHP rule coincides with the Democrat’s claims that they care about those who cannot afford ACA plans or who are currently uninsured.