Trump’s Group Health Plan Rules Struck Down as ACA ‘End-Run’

March 29, 2019by Erik Larson and John Tozzi
U.S. President Donald Trump talks to reporters before departing the White House March 28, 2019 in Washington, D.C. (Olivier Douliery/Abaca Press/TNS)

WASHINGTON — One of President Donald Trump’s health care initiatives intended as a cheaper alternative to Obamacare suffered a crucial defeat in Washington after a judge ruled the policy violates the Affordable Care Act.

U.S. District Judge John Bates in Washington on Thursday blocked new rules governing so-called association health plans, which let businesses and individuals band together to create group health plans that offer less expensive coverage than the ACA — but without some of its protections.

The ruling is a victory for nearly a dozen Democratic state attorneys general who sued to block the policy last year. The judge’s findings come as the Trump administration is renewing its effort to unwind Obamacare by declining to defend it in court.

“The final rule is clearly an end-run around the ACA,” Bates, a 2001 appointee of Republican president George W. Bush, said in the ruling. “Indeed, as the president directed, and the secretary of Labor confirmed, the final rule was designed to expand access to AHPs in order to avoid the most stringent requirements of the ACA.”

The final rules governing so-called association health plans, or AHPs, was created by the Labor Department to comply with an executive order issued by Trump in October 2017. The agency has been phasing them in since August.

Some plans are already in the market, with offerings from UnitedHealth Group Inc. and Anthem Inc. either available now or on the way.

Bates cited the “absurdity” of the Labor Department’s interpretation of a rule forming the basis of the initiative.

The attorneys general — led by New York and including states ranging from Kentucky to California as well as the District of Columbia — argued the new rules violate ACA provisions as well as the Employee Retirement Income Security Act, commonly known as Erisa.

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