Association Health Plans are still a bad idea

You're probably better off with no insurance at all:

These types of plans were nixed under the Affordable Care Act, which required all insurance policies to contain 10 essential benefits and disallowed so-called “skinny” plans that provide little beyond basic catastrophic coverage, if that.

Association health plans were green-lighted again under an executive order signed by President Donald Trump in October 2017, which was seen by many as a way of undermining former President Barack Obama’s ACA. But the plans also come with a host of caveats. They make some observers nervous because in the past association health plans have produced substandard policies that left some patients with big bills or skyrocketing premiums.

All insurance "pools" are a rarefied version of a Ponzi scheme, but these association health plans are even more so. There's simply not enough money in the pot to pay off all the losers if there's even a slight bump in the percentage of catastrophic health treatments, and the fact these "skinny" plans don't cover well care visits or other prophylactic measures actually increases that likelihood. Instead of fast-tracking boondoggles like this, which will likely only be tempting to those who make over the ACA subsidy threshold, the NCGA should be expanding Medicaid to cover those in the gap. And before approving AHPs, they need to wait and see how the courts and Federal government decide this issue:

Passage of this bill and its appearance on the governor’s desk could be a largely Pyrrhic victory for proponents as the federal standards are currently tied up in court.

After Trump signed his executive order, the measure then went to the U.S. Department of Labor to issue guidelines for creating the plans, which were released in fall 2018.

Even before the DOL ruled, Trump’s AHPs were contested in a court case filed by more than a dozen states’ attorneys general, which argued that the AHPs contravened standing federal law. In March of this year, a federal district judge found the new DOL’s rule “does violence” to standing law and sent the rules back to the agency to reconcile it with what Congress has ordered in the past.

Aside from the fact that legitimate associations have a lot of trouble keeping their heads above water, these "association" approaches have historically been abused by genuine fraudsters. Insurance commissioners have fought them for a few decades, and a trip in the way-back machine to the early 2000s might be instructive:

One case, involving Employers Mutual LLC of Carson City, Nev., has left at least 22,000 consumers in 49 states without health-care coverage.

Earlier this month the U.S. Labor Department won a preliminary injunction freezing the company's assets, and several states, including Illinois, Florida, Colorado, Nevada and Texas, have ordered Employers Mutual to stop issuing policies.

Last month, Arkansas' Insurance Department issued a cease and desist order against the unlicensed United Employers Voluntary Employee Beneficiary Association, which does business in 47 states and has 32,000 beneficiaries, said Sara Farris, a department lawyer.

Insurance officials say the insurers often set up phony trade associations to lend an air of legitimacy and to help sell their products. For example, Employers Mutual LLC allegedly created 16 associations with names such as Construction Trade Workers Association, National Alliance of Hospitality & Innkeepers and National Association of Independent Truckers.

I can easily see something like this happening here in North Carolina, especially with Wayne Goodwin no longer at the helm of NC DOI. Remember me mentioning Ponzi earlier?

Virtually all of the illegitimate outfits operate like Ponzi schemes, officials said. A flow of new customers keeps operations afloat for several months while claims are paid slowly to minimize expenses, said Ben Gillard, chief investigator for Nevada's Division of Insurance.

Money from new subscribers is used to pay existing debts. But eventually the insurers stop processing claims, and doctors and hospitals start clamoring for payment.

States then step in, attempting to seize assets and arrange restitution to policyholders and providers. But many companies simply move to another state.

When there's nothing to seize, which is usually the case with fraudsters, all that's left is people filing bankruptcy. Right before they die.

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Comments

I hate to say it,

but I'm halfway tempted to recommend Governor Cooper *not* Veto this, and just let it become law without his signature. It may take a few years, but those who buy in to this nonsense will regret it. And maybe then they will realize that Republicans have no business setting policy in our state.