All of the political, legal and compliance issues aside, what are the potential risks and rewards of Association Health Plans (AHPs)?
Trade associations, who should have an easy time meeting the requirements, will be able to make health insurance available to its constituents as a way to promote “stickiness” of their members and could potentially create a profit stream from implementation of an AHP. Chambers of Commerce could benefit in much the same way.
Franchisors should be able to offer AHPs. Those franchisors who can solve the problem of medical benefits for their franchisees remove a huge barrier to future franchise sales.
Don’t count out the hospitals. They are always looking to secure the support of private medical practitioners. An AHP could, conceivably, do that without having to incorporate their independent practices into the greater hospital systems. There is the “commonality of interest” of medicine.
Small businesses can be winners (as long as their individual state does not regulate AHPs aggressively). In particular, single owner/employee corporations and groups are under community rating. Both of these groups can find AHPs as alternatives to healthcare individual exchanges and the metallic community pricing of the small group markets in their states.
As AHPs hit the ground running, there will be the inevitable “market noise” surrounding any new regulations. This change is not as big as ACA, but if we use the ACA roll out as a guide there will be a flood of information (some of it correct and some of it not). Buyers , in this case, associations beware. Most critical of all will be to understand and choose trusted advisors and vendors who don’t just want to place their products in an association without reviewing and considering if the association is built to last and it is protected from potential regulatory risk.
Associations who wish to explore an AHP for their members would be advised to understand that they are a "commitment not a commodity." To form an AHP that has the proper structure and protections will require some investment. Before making that investment, take advantage of Tycor’s independence and let us not just review your AHP structure but dig in and provide you with an evaluation of your real market potential.