ObamaCare alternative coming from Labor Department

The Labor Department on Tuesday announced the approval of Associated Health Plans (AHPs), a ruling that will let small businesses, including sole proprietorships, to jointly buy bulk health insurance — a cheaper and more flexible option than ObamaCare.

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According to Secretary of Labor Alex Acosta, “Small Business owners and their families need affordable health care options.”

Acosta will appear on FOX Business Network during the 4pm ET hour on 'After the Bell' to discuss the new plans.

Associated Health Plans are expected to cover as many as 11 million people. For perspective, ObamaCare currently covers 11 million people.

Under ObamaCare strict rules made it almost impossible for individuals and small businesses to work together to secure health coverage. By expanding access to AHPs, it will be easier to make coverage more affordable and accessible. With AHPs, a freelance graphic designer, a pet store owner or a carpenter can partner with other freelance graphic designers, other pet store owners and other carpenters to purchase health insurance as a group.

Advocates of the Affordable Care Act are concerned AHPs will draw healthy people away from the pool currently paying into ObamaCare.  Opponents of the plan also point out the quality of care may not be as comprehensive with an AHP since AHPs aren’t required to cover “essential health benefits” covered under ObamaCare like mental health care or prescription medications. But senior Labor officials are clear people will not be turned away because of existing conditions.

Michael Lotito, co-chair of the Workplace Policy Institute, said this will be a “powerful talking point for people who believe in choice.” It could definitely be a boon for Republicans in the midterm elections given recent polling that suggests health care is the most important issue for voters this cycle. It will also likely be the only move Republicans make to dismantle ObamaCare before midterms.

FoxBusiness was the first to break the news of the Labor Department's new policy.

Associations may be established as early as Sept. 1.