Federal ‘Rule’ would weaken comprehensive benefits to individual, small group health insurance plans
FRANKFORT, Ky. (July 26, 2018) – Attorney General Andy Beshear said thousands of Kentuckians would be affected if the federal government is allowed to dismantle essential ACA health care protections like coverage of pre-existing conditions, newborn, maturity and pediatric services, substance abuse treatment and oral and vision care.
Beshear and a group of state attorneys general are asking a federal court to reject the U.S. Department of Labor’s Association Health Plan (AHP) Rule that allows critical changes to the nation’s health care landscape by eliminating access to key ACA health care benefits currently afforded to Kentuckians.
Beshear said the federal government is illegally manipulating a 1974 law – the Employment Retirement Income Security Act or ERISA – to allow the creation of association health care plans by employment groups that would offer fewer protections for Kentuckians currently in the individual and small group health insurance plans under the ACA.
“The Rule seeks to return Kentucky to a time when insurance companies could discriminate in premiums or coverage against individual and small business employees based on pre-existing conditions, age and even gender,” Beshear said. “With Kentuckians facing so many needs, we certainly cannot back away from the ACA provisions that our Kentucky families rely on for their health care.”
Since implementation of the ACA, Kentucky had the second-largest decline in its uninsurance rate (7.5 percentage points) of any state in the country.
Beshear said that is due, in part, to the ACA stabilizing a long-term trend of declining employer-sponsored insurance coverage.
“Employer-sponsored insurance and individual market coverage make up approximately 55 percent of the insurance coverage for Kentuckians,” he said. “The health benefits package afforded to these Kentuckians is essential to the public health of the Commonwealth, where prior to the ACA, 33 percent of the non-elderly population – about 881,000 Kentuckians – had a pre-existing condition.”
Beshear said just as critical is the Rule’s threat to employees who could lose eligibility for health care tax incentives that keep health care insurance premiums affordable.
“If the Rule allows spin-off employer association health groups that meet the ACA’s requirement of minimum essential health care coverage, then employees in these groups will lose their ability to garner federal tax credits,” Beshear said. “This will increase the cost of health care coverage for many Kentuckians.”
Beshear said Congress has legislated – including through the ACA – over the years to protect health care consumers from fraudulent conduct and to ensure consumers have comprehensive health coverage without having higher premiums or fewer benefits based on a pre-existing condition. The AHP Rule would undo critical federal consumer protections and unduly expand access to association health plans without sufficient justification or consideration of the consequences.
Beshear said a major provision of the ACA allows significant and critical assistance for drug treatment, providing coverage to an additional 2.8 million Americans suffering from addiction. It requires both private plans and Medicaid to cover certain drug treatment.
“At a time when the opioid crisis is tearing our families apart, we must have treatment and recovery coverage to help our friends, family and neighbors who have fallen into addiction,” Beshear said. “This coverage is essential in our ongoing fight against addiction.”