The Donald Trump administration released a new rule on Tuesday which expanded Association Health Plans (AHPs), which was lauded by Sen. Rand Paul (R-KY) as the “biggest free-market health care reform in a generation.”

“President Donald J. Trump is expanding affordable health coverage options for America’s small businesses and their employees. Many of our laws, particularly Obamacare, make healthcare coverage more expensive for small businesses than large companies,” said U.S. Department of Labor (DOL) Secretary Alexander Acosta.

“AHPs are about more choice, more access, and more coverage. The President’s decision helps working Americans – and their families – purchase quality, affordable health coverage,” Acosta added.

Sen. Rand Paul (R-KY) cheered the Trump administration’s new rule on Tuesday, saying:

For months, I worked directly with President Donald Trump and Secretary Acosta to make this happen. Today, we are putting more power back into the hands of the American people to choose the health insurance plan that best meets their needs at a price they can afford. I refused to believe we could not keep fighting for pro-patient, pro-worker, and pro-family solutions in health care, and I applaud President Trump for responding and delivering one of the most significant free market health care reforms in a generation.

The DOL rule allows small businesses more flexibility to join together and benefit from the regulatory advantages that many large businesses experience under health insurance rules. AHPs can serve employees in a city, county, state, or particular industry across the nation.

The Department of Labor noted that, under Obamacare, premiums doubled between 2013 and 2017, with deductibles rising even faster. The Congressional Budget Office (CBO) estimated that roughly 400,000 previously uninsured Americans will obtain health insurance under AHPs, while an Avalere Health study found that 3.2 million Americans will leave Obamacare for AHPs.

President Trump signed an executive order in October that expanded AHPs as well as short-term limited-duration insurance plans to offer Americans more affordable options compared to Obamacare.

“This will cost the United States government virtually nothing and will provide people great, great health care,” Trump said in October.

The study also revealed that Americans would experience drastically lower health premiums through AHPs compared to Obamacare.

AHPs would be roughly $2,900 lower per year compared to the small-group market and $9,700 lower per year compared to the individual market.

Avalere cites that the lower average premiums in AHPs mostly result from a healthier insurance pool due to “risk selection” and less generous offerings.

Chris Sloan, senior manager at Avalere, explained, “The proposed rule would lead to millions of individuals and small businesses shifting into a new form of coverage, likely reducing their premiums, but leading to higher premiums in the markets they leave behind.”