The Trump administration is trying again to make health insurance more affordable for independent workers and small businesses. The Labor Department plans to rewrite the rules around who counts as an "employer" - opening the door for more trade groups and professional associations to offer health coverage to their members.
This isn't the first attempt. A similar 2018 rule was struck down in court when a federal judge vacated key provisions in 2019, and finally canceled earlier this year. But with insurance costs climbing fast - ACA insurers want 15% premium hikes by 2027 - officials are taking another shot at the idea.
"While ACA coverage works for many members, others face double-digit premium increases and high out-of-pocket costs," said Shannon McGahn of the National Association of Realtors, where 14% of members currently lack insurance.
The proposed rule would let more groups form what are called association health plans (AHPs). These plans could potentially offer lower premiums by sidestepping some Affordable Care Act requirements that drive up costs. For a 40-year-old buying individual coverage today, monthly payments might decrease from the current $625 average.
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But there's a catch. If younger, healthier workers flock to these new options, it could leave older or sicker Americans facing even steeper costs in the ACA marketplace. That's what happened when a similar effort briefly existed before courts shut it down.
"They're going back to the drawing board on the definition of employer, which is what they did originally, but parts of it were struck down," said Kaye Pestaina of health policy group KFF.
For independent contractors enrolled in marketplace plans, this proposal may bring additional options and potential savings. But the details matter, and those won't be clear until the full proposal comes out.
Small business owners getting crushed by 14% premium hikes might find relief through trade groups offering AHPs. Meanwhile, workers at big companies facing 9.5% increases probably won't see direct effects - their employer plans will stay separate.
The key question is whether this attempt can pass legal muster where the last one failed. If it does, it could reshape options for millions of workers left out of traditional employer coverage. If it doesn't, those double-digit premium increases will keep coming. Either way, it's a sign Washington knows today's system isn't working for everyone - and is willing to try new approaches.
