Kentucky Republican Sen. Rand Paul has a radical idea that he believes can go a long way to reducing the cost of health insurance plans for Americans – he calls it ‘association health plans’ and he is hoping President Trump will get behind his proposal.
Paul recently shared his proposals to lower healthcare and insurance costs during a wide-ranging conversation with The Baltimore Sun where he argued that current efforts to make insurance affordable, such as government subsidies used under the Affordable Care Act (ACA), fail because they do not address the root cause of rising prices.
Paul observed that many working people feel trapped as premiums and subsidies have soared. He contends that increasing subsidies only leads to inflation.
“I think what we should do is do something to bring the prices down. So, let’s say your insurance costs you $20,000 and we give you $10,000 from the government. Next year it’s going to cost $22,000. We’re going to have to give you $12,000. We keep chasing the prices higher,” he said.
“What I want to do is let people buy their insurance as a group. So, for example, 44 million members of Costco — if we all joined Costco and there were 44 million members and one person was in charge of negotiating, that person would call up UnitedHealthcare and say, “I’ve got 44 million members. What price will you give me?”
Paul notes that small businesses have very little leverage of insurance companies but by associating with a larger group of people, that could change.
“So, insurance is a billion-dollar company, and if I’m just a small, small business. I have no leverage with them. But if I join Costco or Sam’s Club or Amazon, I let them purchase for me,” he said.
“So, I have a bill. These plans are called association health plans. I have a bill to legalize the ability to join a cooperative to negotiate your prices. And it’s funny because some of the words I use — collective bargaining, co-op — the people that promoted Obamacare used, but then they never allowed it,” he added.
Although Paul noted that getting his fellow Republicans in the caucus to seriously consider the idea has been difficult—”they all kind of nod their heads and none of them really object, but theyʼre all really not considering it seriously, because I’ve had trouble getting it into the proposal”—he has received support from President Donald Trump.
“Now, in the first Trump administration, I went and talked to Donald Trump in the White House, in the Oval Office, and he agreed with me. And by executive order, he tried to do these association health plans. We really had to change the law. The executive order didn’t go far enough. And then Democratic attorneys general sued him, and in the end, they weren’t really that successful, he said.
“I’ve talked to him again. You know, I have some controversies with him on occasion, but I did talk to him recently, and we exchanged some text messages back and forth. And he says he wants to support this idea again of letting people bargain to get cheaper prices for their insurance.”