On Thursday President Trump signed an executive health care order poised to impact real estate agents and the viability of association health plans (AHPs).
After two failed attempts to pass health care reform through Congress, on Thursday President Trump signed an executive health care order in effort “to provide millions of Americans with Obamacare relief.”
The details of how the order will change the Affordable Care Act (a.k.a. Obamacare), which remains intact at this time, is still unclear.
Here’s what we do know: It ends scheduled payments of government subsidies to insurance companies that currently make deductibles more affordable for low-income customers, and a main component asks the Labor Department to write rules that would allow small businesses to more easily band together through trade and professional associations to purchase health insurance for themselves and their employees, specifically relying on what’s known as association health plans (AHPs).
“This will allow thousands of small business employers to have the same purchasing power as large employers to get more affordable and generous insurance options for their workers,” Trump said in his remarks about the order.
The National Association of Realtors, the largest trade organization in the country serving 1.2 million Realtor members, has long supported AHPs.
Depending on what comes next, the move could have future implications for the health care options available to real estate agents who work for small businesses across the country. However, as it currently stands, Trump’s order only applies to employees, while most agents work as independent contractors.
NAR “will continue to work with the administration and Congress to make association health plans a workable option for Realtors,” NAR President William E. Brown told Realtor Magazine.
Right now, individual Realtor association members can purchase health insurance from a Realtor association (if it’s offered). NAR and the California Association of Realtors are two Realtor associations that offer health coverage.
However, although businesses (like brokerages) can purchase group policies through the Small Business Health Options Program (SHOP) — established as part of the ACA — trade associations can’t currently offer something similar.
Loosened regulations as proposed by the executive order would essentially give real estate brokerages the ability to band together and negotiate for health coverage on a larger scale through a trade association.
In response to a request for comment, NAR directed Inman to a statement from Brown:
“The White House announcement is an important part of the work to expand health coverage opportunities,” Brown said. “Association health plans have long offered promise for small-business owners and self-employed individuals seeking affordable health coverage. NAR is reviewing the specifics of the proposal to determine the promise that it may offer self-employed individuals such as real estate professionals.”
Efforts to help small businesses deal with rising premiums date back to the late 1980s, and AHPs as a solution gained traction in the early 2000s. While they remain popular among conservatives championing the benefits to small business, AHPs could become exempt from some restrictions of the Affordable Care Act, such as the set benefits package standard and the ban on charging higher premiums for those with preexisting conditions. (AHPs would still banned from including lifetime limits).
Republicans’ proposed Better Care and Reconciliation Act, which was killed in July, also created an option for small businesses to purchase insurance on the large group market through an association health plan. At the time The Kaiser Family Foundation (KFF) reported that such a change could cause rate disruption.
— Sabrina Corlette (@SabrinaCorlette) October 10, 2017
The thought goes as follows: People (and companies) will only sign up for the bare minimum, and then might frantically try to find a better policy when something catastrophic happens. This is what individuals did by forgoing insurance until or unless they needed a procedure — and it caused significant problems for insurance companies trying to set rates.
KFF predicts that businesses will follow a similar pattern by signing up for policies that cover their healthy employees, then seeking a more robust policy “if an employee becomes ill or if the group wants more comprehensive benefits.”
Such behavior by small businesses could raise the risk of market instability as well as insolvency and fraud on the part of insurance companies, according to health care policy experts Kevin Lucia and Sabrina Corlette writing for The Commonwealth Fund.
Amber Taufen contributed to the content of this article.