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AHPs and PAHPA: What Policymakers Should Know

President at Paragon Health Institute
Brian Blase, Ph.D., is the President of Paragon Health Institute. Brian was Special Assistant to the President for Economic Policy at the White House’s National Economic Council (NEC) from 2017-2019, where he coordinated the development and execution of numerous health policies and advised the President, NEC director, and senior officials. After leaving the White House, Brian founded Blase Policy Strategies and serves as its CEO.

Today, I highlight two recent Paragon products aimed at better informing the health policy debate. First, hot off the presses, Kev Coleman authored a new policy brief, “Small Business Health Insurance Equity Through Association Health Plans.” AHPs will be a topic at  a House Education and Workforce hearing at 10:15am EST today, “Reducing Health Care Costs for Working Americans and Their Families.”
 
Second, Paragon’s senior policy analyst Drew Keyes submitted a thoughtful response to a request for information (RFI) from the House Committee on Energy and Commerce on the reauthorization of the Pandemic and All-Hazards Preparedness Authorization (PAHPA). I discuss each briefly below.

Association Health Plans

A new Paragon policy brief by health insurance expert Kev Coleman argues that policymakers should look to expanded AHPs to help small businesses offer more affordable health insurance.
 
First, Kev lays out the problems with the status quo, including:

  • As a result of rising premiums, fewer small firms (those with fewer than 50 employees) are offering health insurance. In 2002, 44.5% of small firms offered health insurance. This percentage fell to 31.9% by 2021, a decline of 28%.
  • Due to high health insurance costs, 45% of small firms reported that they could not increase salaries, and 37% reported they could not expand their workforces.

Second, Kev discusses the unfair advantage that big businesses receive in offering health insurance. These include being subject to fewer costly government regulations, greater ability to self-insure rather than fully insure, and increased negotiating leverage. Permitting small employers to join AHPs is thus important for equity reasons.

Kev discusses several improvements to policy that would expand affordability options for businesses and employees, including:

  • Reducing the barriers small businesses face when trying to band together to sponsor a single large group health plan.
  • Extending large group health plan savings to workers laboring within the gig economy.

These reforms would occur without billions of dollars of additional spending through expanded government subsidies.
 
Paragon’s AHP policy brief is worth a full read as it is the most comprehensive and concise explanation of the pertinent issues related to the subject with information useful for both employers and groups considering forming an AHP as well as for policymakers.

PAHPA

In his response to Congress, Drew Keyes’s first recommendation on PAHPA reauthorization is that Congress focus on the core objectives of PAHPA. According to Drew:

A large portion of [the COVID] failures occurred at the nation’s core public health agencies: the Centers for Disease Control and Prevention (CDC), the National Institutes of Health (NIH), and the Food and Drug Administration. The CDC, in particular, plays a significant role in carrying out portions of PAHPA and repeatedly failed in its mission.

Implementing the vital reforms needed at those agencies deserves Congress’ full attention. PAHPA should not be used as a means to expand those agencies, increase grant funding through those agencies, or increase their authority in unrelated matters.

Congress should, instead, undertake a broader effort, outside the PAHPA reauthorization process, to restore the CDC and the NIH to their core missions. Doing so will enhance the effectiveness of the nation’s emergency response when that response involves infectious disease or other public health matters.”

Drew also makes three other recommendations:

  1. Prioritize private sector solutions in addressing the Strategic National Stockpile and supply chain issues.
  2. Avoid redundancy across public health agencies.
  3. Refrain from using PAHPA to expand subsidies through workforce programs.

All the best,
 
Brian Blase
President
Paragon Health Institute

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