News: CJ Exclusives

As policymakers seek health care cost savings, the clock may run out on Association Health Plans

Lawmakers are fighting to help small businesses afford health insurance, but they’re running out of time. 

As the pandemic and the shutdowns wreck the economy, thousands of North Carolinians continue to lose their insurance. North Carolina has nearly 1.2 million uninsured residents. Gov. Roy Cooper and his allies are pushing Medicaid expansion as the solution. But Republicans are skeptical, and they want other reforms. 

Medicaid expansion receded into the background during the second meeting of the N.C. Council for Health Care Coverage on Friday, Dec. 18. Cooper filled the first meeting with reasons to expand Medicaid to cover low-income, childless adults. But after Republicans criticized the first meeting, the council turned its focus to other policies. 

Lawmakers hoped to find a solution for the uninsured in Association Health Plans. These plans allow small businesses to band together when negotiating with insurers. They aim to deliver lower premiums and more affordable care. 

The pandemic and the shutdowns have hammered businesses. Small businesses are trying to make ends meet with lower revenue, even as their costs creep upward. But they pay more for health insurance than their larger counterparts — and many can’t afford it. 

Under Obamacare, the regulations are stacked against small businesses, said Jordan Roberts, John Locke Foundation governmental affairs associate. Unless they have more than 50 employees, businesses must pay to comply with regulations dodged by their larger counterparts. Small businesses found themselves trapped in the individual or small group markets without leverage, paying ever-rising premiums. 

In North Carolina, some small businesses are paying as much as $25,000 a year for health insurance per employee— a burden in the best of times, but a major stress in the COVID economy, said Andy Ellen, president of N.C. Retail Merchants Association.

“That puts intense pressure on them,” Ellen said. “They’re trying to make difficult choices of how to pay their rent, maintain their benefits, but they’re just trying to stay alive to get to the other side.”

Ellen looks to Association Health Plans for a solution. 

“When these mom-and-pop shops and individual retailers can get together to buy health insurance as a large plan, they can get plans at a much more affordable rate,” Roberts said. “How can we level the playing field?” 

But Association Health Plans could be running out of time.

The Trump administration unleashed Association Health Plans with executive orders. The Biden administration could cripple them with the same tactics. 

What Biden will do remains unknown. But critics warn that these plans could weaken the Obamacare exchanges and drive up premiums on the individual market. 

Lawmakers hope to roll out the plans before President-elect Joe Biden gets the chance to sink them. The future of the plans now rests with Insurance Commissioner Mike Causey. 

“I’m hoping that we can put some pressure on Commissioner Causey to move those forward,” Joyce Krawiec, R-Forsyth, told Carolina Journal. “My fear is that President Biden will change those orders, and we won’t be able to execute it. If it’s already underway and working, I think we’ll have another chance at keeping it.”

Causey says he supports the legislation. But his support may be immaterial. Causey says it could be illegal to move forward while the plans remain tangled in federal court. 

“North Carolina is fully prepared to implement AHPs,” Causey told CJ. “But we have to get that court case resolved at the federal level before we can implement it.”

But implementing Association Health Plans won’t change the reasons why health insurance is unaffordable for more than a million North Carolinians, said Roberts. Lawmakers must reform regulations that hurt consumers. 

“The cost of health care drives the cost of insurance,” Roberts said. “Part of this discussion needs to focus on reforms that loosen health care regs and bring down the cost of care.”