Washington’s high-quality association health plans offer model for the nation
Association health plans (AHPs) were put in the spotlight last month when President Trump signed his executive order on health care.
AHPs, which allow small- and medium-sized employers to join together to provide cost-effective health insurance for their employees, are one of the key components of the executive order and are regarded as one way to make health insurance more affordable.
Because Washington state has a long and successful history with AHPs, people started looking here for answers to their questions. Questions like, “What impact will selling insurance across state lines have for the health care market?” And, “What will the executive order will mean for health care in general?”
The answer to most of the questions is: “It depends.” The language in the order left plenty of room for interpretation, so it will depend on how the federal agencies choose to implement it. Our hope is that any changes to the system will result in more choices for consumers, lower costs, improved access to high-quality health care — and that they don’t disrupt what’s working well here in Washington state.
Washington’s history with AHPs dates to 1995 when Gov. Mike Lowry worked with the employer community and legislators to pass legislation allowing small employers to join together in associations. Employers with as few as two employees are eligible to participate in HealthChoice, the AHP created by the Association of Washington Business in response to member interest.
Prior to AHPs, small- and medium-sized employers that wanted to offer health insurance to their employees were unable to tap into the same rates as large employers because they didn’t have the bargaining power that comes from a larger group.
Since they were created, AHPs have grown in popularity, insuring as many as 400,000 people at their peak. Many of those people were not previously insured. For AWB’s plan, approximately 40 percent of employers did not have prior coverage. It’s clear that AHPs expand health care access and choices for small employers, their employees and families.
What’s more, employers that start with an AHP tend to renew. Historically, as many as 90 percent renew coverage year after year.
Washington’s success with AHPs contrasts starkly from the broad generalizations from some critics who claim they are low-quality or loosely regulated plans.
Washington’s AHPs offer high-quality health insurance plans with consumer protections like guaranteed issue (nobody can be denied coverage) and renewal built in. They are fully insured and comply with all state and federal mandates, including those contained in the Affordable Care Act such as dependent coverage up to age 26, lab and x-ray, preventative care and mental health services.
As officials implement the executive order, it’s critical that consumer protections remain in place.
The insurance plans have some additional advantages, as well. They do not rely on federal or state government subsidies, saving valuable resources for other programs. And they foster a competitive health insurance marketplace, driving costs down.
As they begin the hard work of implementing the executive order on health care begins, federal officials will no doubt hear from folks with a wide range of opinions about every element and detail. Regarding AHPs, we hope they will look to Washington state and our use our successful market as a model for the rest of the nation.
Kris Johnson is the president of the Association of Washington Business, the state’s chamber of commerce and designated manufacturing association.