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You are here: Home / Anderson On Health Insurance / Associations and Word Salad

Associations and Word Salad

by David Anderson|  January 2, 20188:28 am| 17 Comments

This post is in: Anderson On Health Insurance

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President Trump spoke at length with the New York Times last week. In Adam’s post he finished up with this task and charge:

There’s a lot more at the link, including some stuff about health care associations that doesn’t make a lot of sense. Perhaps Dave will eventually try to make sense of it for us.

So let’s find this particular piece of word salad:

TRUMP: Wait, wait, let me just tell you. … Also, beyond the individual mandate, but also [inaudible] associations. You understand what the associations are. …

[Cross talk.]

TRUMP: So now I have associations, I have private insurance companies coming and will sell private health care plans to people through associations. That’s gonna be millions and millions of people. People have no idea how big that is. And by the way, and for that, we’ve ended across state lines. So we have competition. You know for that I’m allowed to [inaudible] state lines. So that’s all done.

Now I’ve ended the individual mandate. And the other thing I wish you’d tell people. So when I do this, and we’ve got health care…….

I’ll tell you something [inaudible]. … Put me on the defense, I was a great student and all this stuff. Oh, he doesn’t know the details, these are sick people.

There is a charitable read and there is the read one has after going through It’s A Small World four times in a forty eight hour period.

The charitable read is the president is overclaiming credit for actions that have not yet occurred but are in the pipeline to occur.

The October executive order on healthcare has the federal government making rules redefining what an association must be in order for that association to be able to buy insurance for its members as a self-contained pool.  Association health plans are common already for small business and certain clusters of self-employed individuals.  The executive order has the Department of Labor looking at how to rewrite rules to expand the definition of an association.

Association health plans are able to save money in three ways over the ACA.  First, they are regulated by the 1974 Employee Retirement Income Security Act (ERISA).  ERISA has much lighter regulations on required benefits than the ACA.  Secondly, association plans are allowed to control and underwrite their membership.  They can kick out the family with a trio of hemophiliac sons who have had multiple million dollar years.  Finally, they are far more lightly regulated on financial reserves and the capacity to absorb actuarial risk so when they get hit with big claims, they can easily fold and leave people in the lurch.

From this background, the claim that the President could be making is that more people who are subsidy ineligible will be able to get underwritten insurance at a lower price.  And that claim is true, the bottom 50% of the spending distribution drives 3% of the total claims costs.  So if an association can cherry pick the cheapest and most likely to be healthy individuals and families, those people will have dirt cheap premiums.

The people who make too much for ACA subsidies and who have any significant medical history are screwed.

That is the most charitable reading of the statement.

The less charitable reading is that the President sounded a lot like my three year old niece as we waited in line to see Elsa and she was two hours overdue for a nap.

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Reader Interactions

17Comments

  1. 1.

    Amir Khalid

    January 2, 2018 at 8:45 am

    I don’t think the healthcare stuff is any more comprehensible to President Trump than to most Americans. He didn’t write any of it, and he sure as fuck didn’t read any of it either. Some staffer hit him with a few high points, and he made some word salad out of what little he managed to grasp of that.

  2. 2.

    Betty Cracker

    January 2, 2018 at 8:46 am

    On complex issues, Trump always sounds like someone who has been hastily briefed and is spewing a half-baked mixture of official talking points and bullshit. Some unlucky aide was probably tasked with explaining “healthcare” to Trump with a 5-slide PowerPoint with no more than three bullets per page (and at least one mention of Trump on each slide — plus illustrations featuring attractive young women — to hold his attention). He seized on the association thing because it’s not unlike a real estate scam in a way, if it lets you offer junk policies and pretend they’re the same as a healthcare plan governed by ACA rules.

  3. 3.

    Jeffro

    January 2, 2018 at 8:52 am

    @Betty Cracker:

    it lets you offer junk policies and pretend they’re the same as a healthcare plan governed by ACA rules.

    Correction: these ‘junk’ policies are “big, beautiful health care for all Americans” and certainly better and cheaper* than that evil Obamacare. Just ask him.

    *cheaper in the sense that high-income people won’t have to pay anything to help take care of their undeserving income-impaired fellow Americans

  4. 4.

    FlipYrWhig

    January 2, 2018 at 9:07 am

    @Betty Cracker: @Jeffro: Yup. Some aide said, “don’t worry about health care, stupid people in the press aren’t taking into account the association health plans, and we think millions of people will sign up for those,” and Trump thought, “I knew it, other people sure are stupid and tell a lot of lies.”

  5. 5.

    Barbara

    January 2, 2018 at 9:23 am

    Association policies have always been the last refuge of those who are priced out of other markets, often because of health issues. Small employers where the owner’s child has an immune disorder, or a self-employed individual trying to get a toehold in any kind of group coverage to avoid what has been for many years (pre-ACA) a totally dysfunctional individual market. Most of these groups and individuals will still be better off with regular small group or exchange based coverage. I have clients who refer to self-insured plans as ERISA plans, but in fact, all employer issued coverage is subject to ERISA. Insured plans are also subject to state insurance law. The president seems to think that association plans will not be subject to state insurance law. They will be unless they are not insured at all. The contested space will be the extent to which states can prohibit voluntary associations that are associations purely for the purpose of purchasing insurance if the federal government tries to assert that such voluntary associations are okay. We will wait for the rules, but as I said above, when you scratch the surface of association plans, they aren’t usually all that enticing.

  6. 6.

    Skepticat

    January 2, 2018 at 9:31 am

    Why do we bother to parse what could have been expressed more cogently by monkeys with typewriters (not even computers)? The only reason for this babbling is that he needed some words to fill in around “I” and “beautiful” to keep talking for as long as possible.

  7. 7.

    Alternative Fax, a hip hop artist from Idaho

    January 2, 2018 at 9:44 am

    @Amir Khalid: I suspect you are underestimating the comprehension capacity of most Americans, but who wouldn’t? I wish you and the girl a wonderful 2018 and I look forward to seeing more of you in threads.

    As to the alleged president, I think Mayhew’s niece would make much more sense, so the reading is much less charitable to her. My condolences for your trips through that ride. I still have flashbacks of having to hear that song multiple times a day and can’t even imagine the horror of the ride, but I suspect once would do me in.

  8. 8.

    Cheryl Rofer

    January 2, 2018 at 9:46 am

    When I tweeted about this shortly after the words were published, I got a response from an account that said oh yes, I got adequate insurance from an association plan after Obama regulations ruined my business. Now I can build it back up again.

    I wasn’t fully up on the status of association plans, but managed to find that they hadn’t come into effect yet, it was simply the child-President’s belief that he is bringing light and goodness to the world. I tweeted back a url to the bot and blocked it.

    Gotta stay alert.

  9. 9.

    Villago Delenda Est

    January 2, 2018 at 10:55 am

    @Cheryl Rofer: Probably a Russian bot.

  10. 10.

    schrodingers_cat

    January 2, 2018 at 11:02 am

    @Cheryl Rofer: Please don’t call him a child, children don’t know any better, they haven’t had the life experience. The malevolent personage in the WH knows perfectly what he is doing. He is using his power to hurt the maximum number of people that he can.

  11. 11.

    Barbara

    January 2, 2018 at 11:36 am

    @schrodingers_cat: I agree with this. We give the benefit of the doubt to children because they can gain insight and self-correction as they grow up. That isn’t going to happen with Trump. I don’t know what makes me angrier — the people who voted for him because of his racism and misogyny or the people who shrugged their shoulders and voted for him in spite of those things.

  12. 12.

    Cheryl Rofer

    January 2, 2018 at 11:42 am

    @schrodingers_cat: I try to come up with non-obscene, non-scatological synonyms for the monster in the White House. I also like to take in a wide spread of his behaviors. It’s tamer than what some do here. He does indeed seem to enjoy hurting people. But children often do, too. I’m not going to defend any of my synonyms strongly. Some of them will be off. I want to focus on his behaviors.

    @Villago Delenda Est: Yup

  13. 13.

    Enhanced Voting Techniques

    January 2, 2018 at 11:49 am

    @schrodingers_cat:

    The malevolent personage in the WH knows perfectly what he is doing

    Cite evidence because everything I’ve seen out Trump is nothing but wishful thinking or impulsively lashing out.

  14. 14.

    schrodingers_cat

    January 2, 2018 at 12:12 pm

    @Enhanced Voting Techniques: He may not know how exactly his policies will hurt but his intent of wanting to do harm to many is clear, be it immigration, taxes or health policy (ACA repeal). You truncated my sentence. This is what I said.

    The malevolent personage in the WH knows perfectly what he is doing. He is using his power to hurt the maximum number of people that he can.

    @Cheryl Rofer: In my opinion, calling him a child minimizes the harm he is doing. YMMV. Children do sometimes do hurtful and cruel things but their intent usually is innocent or at least not malevolent. It was a request btw, not necessarily a criticism.

  15. 15.

    schrodingers_cat

    January 2, 2018 at 12:13 pm

    @Barbara: Both. The result was the same.

  16. 16.

    efgoldman

    January 2, 2018 at 12:31 pm

    @schrodingers_cat:

    Please don’t call him a child, children don’t know any better, they haven’t had the life experience. The malevolent personage in the WH knows perfectly what he is doing.

    In the sense of being a hurtful asshole, yes. In any other sense (adopting and “explaining” a policy) no, he doesn’t. Try explaining higher order math to a prairie dog – same thing.

  17. 17.

    schrodingers_cat

    January 2, 2018 at 12:58 pm

    @efgoldman: His rhetoric and his policy and political appointments have furthered his stated political goals regarding immigration.

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