Twelve attorneys general filed a lawsuit Thursday challenging the U.S. Department of Labor’s Association Health Plan Rule, which expands how AHPs are formed to evade consumer protections and sabotage the Affordable Care Act. AHPs have a long history of fraud, mismanagement, and abuse, with millions in unpaid claims for policyholders and providers, often leading to consumer bankruptcies, said New York Attorney General Barbara D. Underwood.
“The Trump administration’s AHP Rule is nothing more than an unlawful end run around the consumer protections enshrined in the Affordable Care Act – part of President Trump’s continued efforts to sabotage our health care system,” said Underwood. “Our lawsuit today seeks to safeguard federal protections under the ACA that help guarantee access to quality, affordable health care.”
The lawsuit was filed by the attorneys general of New York, Massachusetts, District of Columbia, California, Delaware, Kentucky, Maryland, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.
During the last several decades, Congress has legislated – including through the ACA – to protect health care consumers from AHPs’ fraudulent conduct and to ensure consumers have comprehensive health coverage without having higher premiums or fewer benefits based on a pre-existing condition, she said.
President Trump cited the sabotage of the ACA as the clear purpose of the AHP rule, saying that it was a “truly historic step in our efforts to rescue Americans from Obamacare and the Obamacare nightmare” and would “escape some of Obamacare’s most burdensome mandates.”
The lawsuit filed Thursday alleges that the department violated the Administrative Procedures Act when it developed the AHP rule. It also argues that the rule violates both the ACA and the Employment Retirement Income Security Act and that it unlawfully reverses decades of agency and judicial interpretation of ERISA’s key terms, with the main purpose of undermining the ACA and without accounting for increased risk of fraud and harm to consumers based on a longstanding history by similar plans.
The attorney's general are urging that the AHP rule be vacated.