ROBERT SIEGEL, HOST:

Now we turn to Sabrina Corlette. She used to be a staffer with the Senate Health Committee. She now studies the health insurance industry at Georgetown University. Welcome to the program.

SABRINA CORLETTE: Thank you.

SIEGEL: One of the things this executive order does is allow small businesses to band together with an association so they can get more coverage and cheaper coverage for their employees. What's the problem with that?

CORLETTE: Well, there's a couple of problems. One is that the Affordable Care Act is very clear that if you have a older or sicker group of employees, insurance companies can't discriminate against you. This would turn that on its head. And if you came into the association with, say, somebody who had cancer or women of childbearing age, you could find that your premiums would be much, much higher than employers with healthier workers.

SIEGEL: But the difference would be that the associations would not be regulated, would not be covered by the requirements of the Affordable Care Act.

CORLETTE: That's right. That's right. The associations would be exempt from a lot of the insurance protections that are in the ACA.

SIEGEL: But as I understand it, health insurance policies that we get from our employers are also not directly covered in that sense. If everybody got a job at a company that gave them insurance, would that pose the same problem?

CORLETTE: Well, I think it's important to distinguish between the kind of insurance you get at a large employer and what you might get through these association health plans. Remember that a large employer like NPR has both healthy and not-so-healthy employees, but the reason you have insurance is not 'cause you need insurance. It's because you work at NPR.

Association health plans are different. The reason people are coming to them is because they need insurance. And so insurance companies are trying to protect themselves from people who need to use a lot of health care services.

SIEGEL: So the members of the association are individuals, or they're groups of employees at companies who - what's the association an association of?

CORLETTE: Well, here it sounds like what this executive order is directed at is associations that are made up of small employers. So you could imagine the Bar Association might have a group of law firms signing up for health insurance or the gym owners association. So there are multiple reasons why you could create an association, but essentially people would be using it to purchase insurance for their employees.

SIEGEL: But I mean, I'm sure you can appreciate what sounds like the appeal of this, which is that 20 law firms joining together to buy health insurance sounds like it'd get a better deal than each law firm individually trying to do that.

CORLETTE: Well, you'll get a better deal if you have young, healthy workers. If you have older, sicker workers, you will be charged a higher premium to reflect the higher use of health care services.

SIEGEL: As we've mentioned, 150 million of us I think get health insurance through our employer. Are we affected by this executive order?

CORLETTE: Well, it's hard to say. If these association health plans do become more widespread and are - become exempt from state laws, we could be, particularly if we work for a small employer. If, for example, we have a problem with our plan and we're in one of these associations, we may not be able to get help from our state insurance department - for example, if claims aren't being paid.

SIEGEL: What do you say to the argument that proposal like the one that's made today with these new rules shouldn't be compared with the ideal but rather with the real situation that many people face, which is the only policies they can afford and, under the Affordable Care Act, have such high deductibles that they feel they have no access to the real coverage? There's a serious problem out there.

CORLETTE: There's no question that the Affordable Care Act could use some policy fixes, but these are not the policy fixes that we need. Rather than fixing the problems that do exist with the Affordable Care Act marketplaces and shoring up the coverage, this effectively undermines those marketplaces and makes the coverage that is available to people with pre-existing conditions much less stable and secure.

SIEGEL: Sabrina Corlette studies health insurance reform issues at Georgetown University. Thanks for talking with us.

CORLETTE: Thank you.

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