After Congressional and Senate Republicans failed repeatedly to repeal and replace the Affordable Care Act, a combative President Donald Trump now has taken the matter into his own hands.
On Thursday, Trump signed an executive order that he said will bring affordable health insurance to millions of Americans and effectively continue his efforts to dismantle former President Barack Obama’s signature legislation.
Trump’s order — a broad one indeed — directs his administration to develop policies to increase health care competition and choice in order to improve the quality of health care and lower prices.
However, the action virtually guarantees the destabilization of Obamacare by taking out younger and healthier Americans from the health care exchanges established by the Affordable Care Act, also known as Obamacare.
“This is a sabotage of our health care system by executive order. For nine months, the Administration and congressional Republicans have abdicated their basic obligation to make sure our health care system works for families,” said Sen. Bob Casey (D-Pa.). “Instead, President Trump and Republicans in Congress have engaged in a sabotage of our health care system, which has driven up premiums and costs for the middle class. This executive order is trying to return us to the days when you could buy junk insurance — it was cheap, because it didn’t cover much.”
The administration and congressional Republicans have a maniacal obsession with repealing the Affordable Care Act that is harming families across the nation, the senator added.
“They have put forth legislative schemes that would drive up premiums, increase costs and reduce protections. These schemes have been soundly rejected, yet the Administration is now trying to enact them via executive order,” he said.
Further, instead of hurting families and seniors, the administration should work in a bipartisan way to improve the health care system so that it works better for the middle class, Casey said.
However, Trump said the measures should have been done a long time ago, and could have been done a long time ago.
Specifically, the president is directing the Labor Department to study how to make it easier for small businesses, and possibly individuals, to join together and buy health insurance through nationwide association health plans, a senior administration official told CNN on Thursday.
The department could give employers in the same industries more flexibility to offer group coverage across state lines, providing them with a broader range of policies at lower rates.
Separately, the order would allow consumers to buy short-term policies, which don’t have to comply with Obamacare’s protections for those with pre-existing conditions.
Also, it looks to broaden the ability of employers to give workers money to buy their own coverage through health reimbursement arrangements.
The changes could take six months or more to take effect, a senior administration official said.
Critics, however, worry that the order may free these association health plans from several key Obamacare regulations and from state oversight, allowing them to sell plans with lower premiums but skimpier benefits.
That could draw younger and healthier customers away from Obamacare and send premiums skyrocketing for sicker people left in the exchanges.
Exactly how the agencies would change current regulations remains to be seen.
Association health plans, which are usually sponsored by trade organizations or interest groups, already exist. Spurred by the executive order, federal agencies could amend the rules governing these plans so they are no longer subject to state regulation, health policy experts told CNN, speaking before the order was issued. Instead, the nationwide plans may come under the same federal oversight as large-employer policies.
Large group plans do not have to adhere to all of Obamacare’s provisions, such as the requirement to provide comprehensive policies that cover prescription drugs, mental health and substance abuse, according to Kevin Lucia, project director at Georgetown University’s Health Policy Institute.
The switch could also allow association plans to deny coverage to the group or set rates based on the medical history of those in the group, so plans with younger, healthier members could offer lower premiums. The administration said that employers participating in these plans would not be allowed to exclude employees or develop premiums based on health conditions.
The president’s action also looks to expand the use of short-term insurance plans.
These policies are also not subject to Obamacare regulations, so they can exclude those with pre-existing conditions or base rates on consumers’ health background. Also, they usually offer less comprehensive coverage.
The Obama administration limited these plans’ coverage to 90 days. Previously, they had been available for up to a year.
“People were unfortunately very susceptible to junk insurance” in the past, Karen Pollitz, an insurance market expert at the nonprofit Kaiser Family Foundation, told the Los Angeles Times.
Consumers often did not understand the limits of the coverage they bought, leaving them without protections if they unexpectedly got sick, patient advocates found.
Allowing less comprehensive health plans back into the market also tends to make health coverage more expensive for sick people.
Obamacare aims to create large risk pools for people who don’t get insurance on the job or coverage under a government plan, like Medicare. Healthy people in the pool offset the costs of sicker people, making insurance feasible for those with preexisting health problems.
Creating a two-tier system in which some consumers can buy skimpier plans could reduce costs for the healthy, but over time, can destabilize an insurance market as insurers are forced to charge more and more for the sickest patients, according to experts such as the American Academy of Actuaries.
“A key to sustainability of health insurance markets is that health plans competing to enroll the same participants must operate under the same rules,” the actuaries said in a brief earlier this year on association health plans, according to the Times.
The group warned that insurance markets in many states could be “challenged” and “ultimately, higher-cost individuals and small groups would find it more difficult to obtain coverage.”
That is why proposals in the past to expand the use of association health plans have been viewed suspiciously by state regulators, patient advocates, even some insurers.
Legislation in the early 2000s to allow more association health plans drew opposition from more than 450 national and local organizations around the country.
The National Governors Association warned at the time that the plans “would be free to selectively market to healthy groups by selling stripped-down benefit packages that exclude benefits now required by states.”