A Federal Judge on Thursday Struck Down a Trump Administration Rule that Allows Small Businesses to Band Together and Set Up Health Insurance Plans that Skirt Requirements of the Affordable Care Act (ACA).
The Rule is “clearly an end-run around the ACA,” said the Judge, John D. Bates, of the Federal District Court for the District of Columbia.
The Ruling was the Second Big Defeat this week for President Trump on a Top-Priority Item on his Health Care Agenda as he has sought to use the Courts to Obliterate his Predecessor’s Signature Achievement. Another Judge on Wednesday Blocked Medicaid Work Requirements in Arkansas and Kentucky.
Trump Promoted the Small Business Health Plans as a way to save People from the “Nightmare of Obamacare.” He told Small Business Owners in June that “you’re going to save massive amounts of money and have much better health care.”
In the Economic Report of the President released last week, the White House said the Small Business Plans, known as Association Health Plans, showed how Consumers Benefit when the Government Reduces Federal Regulations and Increases “choice and competition in health care markets.”
But Judge Bates said that the Rule Authorizing such Health Plans was Unlawful and must be Set Aside because it “does violence” to the Employee Retirement Income Security Act of 1974, the Framework for Employer-Sponsored Health Plans covering Tens of Millions of Americans.
Large Employer-Sponsored Health Plans can Avoid some Requirements of the ACA. But Judge Bates said that the Trump Administration had Improperly Stretched the Statutory Definition of “Employer” to include “virtually any association of disparate employers connected by geographic proximity”, as well as Sole Proprietors who Own Businesses without any Employees.
The Lawsuit, New York v. United States Department of Labor, was filed by New York and 10 other States. “We are pleased that the District Court saw past the Trump administration’s transparent effort to sabotage our health care system and gut these critical consumer protections in the service of its partisan agenda,” Letitia James, the Attorney General of New York State, said Thursday night.
Judge Bates said that the Final Rule issued by Trump and Labor Secretary Alexander Acosta “creates absurd results under the Affordable Care Act.” For example, he said, Two Business Owners who have No Employees would be treated as both Employers and Employees. Likewise, he said, a Group of 51 Individuals, none of whom Employ anyone, would be treated as 52 Employers and 51 Employees and would be Free from many Requirements of the ACA that apply to Health Insurance in the Individual and Small-Group Markets.
The Trump Administration’s attempt to Squeeze Self-Employed Individuals into the definition of Employer is “a magic trick,” and the Rationale offered by the Labor Department is a Sleight of Hand, Judge Bates said. Moreover, he said, in issuing its Rule for Small Business Health Plans, the Trump Administration Ignored the Language and Purpose of both the ACA and the Employee Retirement Income Security Act, known as Erisa.
The Final Rule, he said, Illegally “expands the definition of ‘employers’ to include groups without any real commonality of interest and to bring working owners without employees within Erisa’s scope. Because the final rule stretches the definitions of ‘employer’ beyond what the statute can bear, the final rule is unlawful” under the Administrative Procedure Act, which Sets the Standards for Federal Rule-Making, the Judge said.
Republicans in Congress have been trying for Two Decades to Promote Association Health Plans through Legislation. Using his Regulatory Authority, Trump tried to do what Congress could not Accomplish.
Representative Robert C. Scott (D-VA, 3rd District) and the Chairman of the Education and Labor Committee, said Judge Bates’s Ruling was “an important victory for workers and consumers who would be harmed by the administration’s decision to expand the reach of association health plans. The Department of Labor’s final rule is one of numerous examples of this administration’s efforts to sabotage the Affordable Care Act through executive action,” Mr. Scott said.
Judge Bates Voided Major Provisions of the Rule and Sent it Back to the Labor Department to Determine if any of the Rule could be Salvaged. Under the Rule, issued by the Trump Administration in June, Association Health Plans were Exempt from many Consumer-Protection Mandates in the ACA. They were Not Always Required to Provide “essential health benefits” like Mental Health Care, Drug Abuse Treatment, Emergency Services, and Prescription Drugs.
Labor Department Officials said Association Health Plans would Not be able to Deny Coverage or Charge Higher Rates to Individual Employees with Pre-Existing Medical Conditions.
Small Business Health Plans have a Long History of Fraud and Abuse that have Left Employers and Employees with Hundreds of Millions of Dollars in Unpaid Medical Bills. The Problems are described in Dozens of Court Cases and Enforcement Actions taken over more than a Decade by Federal and State Officials who Regulate the Plans.
In many cases, the Labor Department said, it has Targeted “unscrupulous promoters who sell the promise of inexpensive health benefit insurance but default on their obligations.” In Several Cases, it has Found that People Managing these Health Plans Diverted Premiums to their Personal Use. Trump Administration Officials had said they would Tighten Supervision of the Plans to Prevent Repetition of such Abuses.
On Monday, the Trump Administration Broadened its Attack on the ACA, telling a Federal Appeals Court that the Entire Law should be Invalidated. If the Appeals Court accepts the Administration’s Arguments, Millions of People could Lose Health Insurance, including those who Gained Coverage through the Expansion of Medicaid and those who have Private Coverage Subsidized by the Federal Government.
The Administration’s position, urging the Appeals Court to Throw Out all of the ACA, stunned Members of Congress, including many Republican Senators who said they had No Desire to Revisit the Issue after their Failure to Repeal the Law in 2017.
But Trump plowed ahead, Promising to Devise a Replacement for the ACA. “The cost of Obamacare to people is far too much,” Trump said on Thursday. “The deductibility is ridiculous. It averages more than $7,000, meaning it’s unusable. So Obamacare has been a disaster.”
But the Republicans are looking at this and how it will affect their Re-Election. And will the Supreme Court without the Mandate maintain the ACA?
NYC Wins When Everyone Can Vote! Michael H. Drucker
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