Issues & Insights

Expansion Of Association Health Plans Would Improve Health Care System

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The U.S. health care system, as currently constructed, is broken. Although many on the left are calling for a “free” single-payer system, aka government-run health care, common sense tells us that free health care is not possible nor preferable.

Although several single-payer plans have been proposed, they all look relatively similar and would be extremely expensive. Why try to lower costs when taxpayers pick up the tab? A report by the Mercatus Center estimated a single-payer system would result in a 10-year $32.6 trillion increase in federal spending. This is not affordable, given the ever-increasing national debt.

A free-market oriented health care system stands in stark contrast to any single-payer option. Among the many difference, a free-market system would drive down costs and increase innovation. 

One particular free-market health care option that is gaining attention in the halls of Congress is the expansion of Association Health Plans, also known as AHPs.

In short, AHPs are group health insurance plans that allow individuals to band together to purchase health insurance at a lower rate than they ordinarily would on the individual market.

Currently, about 11 million people receive health insurance through the Obamacare exchanges. Yet, in several states, there is only one option available. These plans are also too expensive for many Americans, especially those who are not eligible for Obamacare subsidies.

Making matters more complicated, the gig economy has transformed the way we work and live. However, our outdated health insurance system, which is too often tied to one’s employer, is unable to meet the needs of millions of Americans. 

Our work environment has evolved significantly in recent years. Now, more than ever, opportunities for self-employment are a reality.

On average, an individual will hold 12 different jobs over a lifetime, yet our society still adheres to an antiquated system that categorizes health insurance as an employee benefit. 

Imagine a world where your local membership shopping club or health/fitness club could sell health insurance to members. Large groups of individuals could band together to negotiate with insurers to increase coverage with lower premiums and deductibles. In a nutshell, this is what AHPs would usher in to the health care market.

One of the fundamental differences between policy proposals like AHPs and a single-payer option is that AHPs place control over health care decisions in the hands of patients, not the government. 

A single-payer health insurance system is one that would leave individuals at the whim of a government that is dysfunctional at best and would result in increased costs, as well as a likely reduction in quality of care. 

If anything, Obamacare has showed us that increased government intervention and mandates in the health care market result in higher premiums and deductibles, which is partly responsible for the fact that 27 million Americans are still unable to afford government health insurance.

Big bailouts and subsidizing bad public policy are not viable solutions to improve access and quality of care. Some politicians are still riding on the coattails of Obama’s failed policy, which has not met its high expectations. Simply, Obamacare is not affordable and does not offer choices that consumers desire.

Obamacare has been the law of the land for more than a decade. It has not worked, yet many on the left would rather double-down and go all-in on government-run health care. This would not be wise.  

Americans deserve better than another highly touted government program, especially when it comes to our health care. Part of the solution to curbing ever-increasing costs is one that puts patients’ needs at the center of the discussion. Association Health Plans do that by providing more choices for Americans who are looking to purchase reasonable health care insurance while receiving quality coverage in return.

Christina Herrin (cherrin@heartland.org) is the government relations manager of Health Policy at The Heartland Institute, a non-partisan, free-market think tank headquartered in Arlington Heights, Illinois.

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