The Trump administration Thursday proposed new rules following up on the president's pledge to let certain small businesses and trade groups band together to buy health care, a move that could weaken the Obamacare insurance marketplaces.
The expansion of so-called association health plans is part of a broader effort to encourage the rise of cheaper coverage options that don't comply with certain Obamacare patient protections and benefit rules.
The proposed rules stem from an executive order President Donald Trump signed in October directing federal agencies to loosen restrictions on short-term health insurance and association health plans, in a bid to create more competition and drive down premiums. However, state insurance regulators and Obamacare advocates have warned the lax rules could open the door to a new wave of poorly regulated health plans that offer limited coverage.
The proposed rule issued Thursday by the Labor Department would rewrite existing regulations under the federal ERISA law to let more groups qualify as associations that can purchase coverage outside the Obamacare markets.
Trade groups and small business associations have argued that the newfound leeway would expand their purchasing power, increasing health care choices for small employers and franchise operators.
"Expanding access to AHPs would provide more affordable health insurance options to many Americans, including hourly wage earners, farmers, and the employees of small businesses and entrepreneurs that fuel economic growth," the proposal states.