Healthcare

States sue Trump administration over expansion of skimpy group insurance plans

A group of 11 states and Washington, D.C., are suing the Trump administration in an attempt to roll back a regulation that allowed for the expansion of certain health plans that skirt ObamaCare regulations.

The lawsuit, led by New York Attorney General Barbara Underwood (D) and Massachusetts Attorney General Maura Healey (D), alleges that the Department of Labor violated the Administrative Procedures Act when it wrote a rule expanding access to association health plans.

Association health plans allow small businesses and other groups to band together to buy health insurance. The rule allows more groups to join together to form associations.

The move is part of a broader Trump administration effort to open up skimpier, cheaper plans as an alternative to ObamaCare plans.

The plans are cheaper in part because they do not have to cover services like prescription drugs or mental health.

In the complaint, the attorneys general allege the rule "upends a decades-old understanding of a foundational employee benefits law for the purpose of exempting a significant portion of the health insurance market from the Affordable Care Act's consumer protections."

The rule "would undo critical federal consumer protections and unduly expand access to AHPs without sufficient justification or consideration of the consequences," the attorneys general said.

Democrats strongly oppose the rule as allowing for "junk" insurance that will not meet people's needs and that will cause premiums to rise for those remaining in ObamaCare plans, once some healthier people are siphoned off into the new plans.

The complaint alleges the final rule "increases the risk of fraud and harm to consumers, requires states to redirect significant enforcement resources to curb those risks, and jeopardizes state efforts to protect their residents through stronger regulation."

Aside from New York and Massachusetts, the other states signing onto the lawsuit are California, Delaware, Kentucky, Maryland, New Jersey, Oregon, Pennsylvania, the District of Columbia, Virginia and Washington.

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