Association Health Plans (AHPs) once allowed small businesses and the self-employed to band together to purchase insurance, giving them access to the economies of scale, negotiating power and lower premiums typically reserved for large employers. Although these plans have since been significantly curtailed, proposed legislation — the Association Health Plans Act — seeks to reverse that trend by expanding access again. A revival of AHPs would offer more choices and introduce meaningful competition into a stagnant health insurance market.
AHPs were once far more accessible, but that changed with the passage of the Affordable Care Act, which required many AHPs to comply with coverage requirements that drove up AHPs’ costs. However, the ACA exempted certain groups — primarily professional associations and unions, allowing them to continue offering plans without meeting all ACA requirements. As a result, AHPs that were not exempted started to disappear.
Justin Leventhal is a senior policy analyst for the American Consumer Institute, a nonprofit education and research organization that advocates for consumers through evidence-based analysis and data. Follow us on X @ConsumerPal.