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Labor Dept. Has Health-Care Pitch for GOP Candidates

May 15, 2018, 10:31 AM

The Trump administration’s fast-tracked effort to bolster small business health coverage is poised for release just in time for GOP candidates to tell midterm voters that relief from Obamacare is on the way after all.

For the past seven months, Labor Department officials have been rocketing the association health plan rulemaking through the typically plodding regulatory process. Now one bureaucratic step removed from final publication, the rule is on the cusp of helping 11 million people sign up for employer-sponsored benefits as an alternative to the Affordable Care Act’s individual marketplace, according to administration estimates.

But Americans complaining about soaring ACA premiums aren’t the only constituency the administration may be trying to help out.

Republican lawmakers who discuss the rule on the campaign trail can “absolutely” help convince voters that the GOP-controlled Congress hasn’t failed on its promise to repeal Obamacare, Sen. Rand Paul (R-Ky.) told Bloomberg Law in April.

“I think it has the potential to totally transform the insurance market, and of course there would be political ramifications if it looked to be successful,” added Paul, a leading champion for association health plans on Capitol Hill.

The rule will expand access to a type of small-business health option, known as association health plans, by changing the agency’s interpretation of the word “employer.” The new definition would allow small businesses and self-employed individuals to band together in associations by industry or geography and purchase group health insurance.

Supporters say the change allows small businesses to purchase affordable health insurance in a way similar to large companies. Critics say the cheaper, skinnier plans will lure healthy people away from the ACA marketplace, leaving behind an older and sicker population.

For Republicans chasing votes in November, discussing AHPs could prove useful as the GOP strategizes to retain thin majorities in the House and Senate. Legislators likely will want to show constituents that their years of pledging to replace Obamacare with more affordable options are coming to fruition, even if it’s through agency rules.

The White House has accelerated the rulemaking’s timeline but won’t say whether that’s aligned with an election cycle in which health-care policy is sure to come up. But the speedy action could raise concerns that corners have been cut, amplifying the criticism that the rule will create skimpy coverage.

“Any strategy—political or otherwise—that is built around weakening patient protections and sabotaging the health-care system is deeply flawed,” Rep. Bobby Scott (D-Va.), ranking member on the House Committee on Education and the Workforce, told Bloomberg Law in an email.

The White House said the final AHP rule “is going through a normal, deliberative, regulatory process.”

“We are taking our time, and making sure the rule works to expand affordable coverage options for the many Americans who have suffered under Obamacare,” a White House spokesman told Bloomberg Law.

If the final rule is published by June, as expected, it would arrive only six months after the department issued the proposed version, which opened up public comment. Other economically significant rulemakings can take years to wend their way through the same process.

Politics Versus Policy

The rule being finalized by summer would “make some sense” because of midterms, Chris Condeluci, an employee benefits attorney and former tax counsel to the Senate Finance Committee who worked on the ACA, told Bloomberg Law.

Members of Congress likely would want to use the finalized rule in their campaigns, “and if this rule is finalized before the midterms, they don’t run into any issues if politics shift,” he said.

One of the most ardent proponents of the effort, former Trump HHS Secretary Tom Price, acknowledged that politics plays a role, but he said the DOL timeline is unrelated.

“I think it’s good policy makes good politics, but the fact of the matter is the need exists for folks to be able to gain appropriate coverage,” said Price, who resigned from the administration last fall a few days before the initiative was publicly announced. “Whatever we can do to make it so that need is filled is wonderful. So whether Republicans or Democrats are supporting it makes less difference.”

Will Voters Care?

The Republican strategy may be to use a final rule as political fodder. Some question whether the tactic will make a real impression on voters.

Marc Machiz, former regional director of the Employee Benefits Security Administration’s Philadelphia office, told Bloomberg Law that he doesn’t see the rule having a big impact on the midterms. Instead, Machiz said he sees it as a larger effort by Republicans to dismantle the ACA.

A finalized rule makes it look like there are more health-care options for voters in “the very short term,” Machiz said. “Of course, all the bad things that will flow from it will take time to develop,” he said.

Fraud and insolvency were hallmarks of insurance schemes similar to association health plans in the past. Machiz, among others, says the rule intentionally glosses over that history, painting a too-rosy picture picture of what’s to come.

Tim Jost, emeritus professor at Washington and Lee University and health-care law author, told Bloomberg Law that Republicans might believe that the rule could help them in the midterms, but he’s not sure that boost would come from voters.

“They may be getting their donor base excited,” Jost said. Many of the groups who have been eager to offer association health plans early, like the National Restaurant Association and the U.S. Chamber of Commerce, are Republican donors.

The U.S. Chamber’s vice president for health policy, Katie Mahoney, told Bloomberg Law that even though the Chamber won’t likely be eligible to form an association health plan of its own, the business lobby supports the flexibility for small businesses that will ensue.

And yes, that fits with a longtime priority of the Republican Party, she added.

“Health care has been a top issue for a number of cycles now, and as premiums in the individual and small group market continue to rise, solutions and opportunities to have more affordable access to insurance that is meaningful is likely to be appealing,” Mahoney said. “I suspect that the Republicans and those that support the proposed rule, which will likely be finalized before the election, are going to view this as an opportunity for them to gain support.”

To contact the reporters on this story: Madison Alder in Washington at; Ben Penn in Washington at

To contact the editors responsible for this story: Jo-el J. Meyer at; Chris Opfer at; Martha Mueller Neff at