Executive order triggers health insurance changes
Cheaper policies, fewer benefits undercut ‘Obamacare’ mandate
WASHINGTON — President Donald Trump signed an executive order Thursday that clears the way for potentially sweeping changes in health insurance, including sales of cheaper policies with fewer benefits and fewer protections for consumers than those mandated under the Affordable Care Act, also called “Obamacare.”
But most of the changes will not come until federal agencies adopt regulations, after an opportunity for public comments — a process that could take months.
“With these actions,” Trump said, “we are moving toward lower costs and more options in the health care market, and taking crucial steps toward saving the American people from the nightmare of Obamacare.”
“This is going to be something that millions and millions of people will be signing up for,” the president predicted, “and they’re going to be very happy. This will be great health care.”
The order resulted from Trump’s frustration with his inability to persuade a Republican-controlled Congress to repeal the Affordable Care Act, a pillar of President Barack Obama’s legacy. Supporters of the current health law called the order “sabotage,” a way to destroy the Affordable Care Act without winning a majority in Congress.
Trump directed three Cabinet agencies to develop rules that would expand access to less expensive, less comprehensive insurance, including policies that could be sold by trade associations to their members and short-term medical coverage that could be offered by commercial insurers to individuals and families.
Many of the new insurance products could be exempt from requirements of the Affordable Care Act that Republicans say have contributed to sharp increases in premiums but that supporters say have created a baseline of care that has protected consumers from “junk insurance.”
Administration officials said they had not yet decided which federal and state rules would apply to the new products.
Trump’s order could eventually make it easier for small businesses to band together and buy insurance through new entities known as association health plans, which could be created by business and professional groups.
A White House official said these health plans “could potentially allow American employers to form groups across state lines” — a goal championed by Trump and many other Republicans.
In a summary of the new executive order, the White House said that a broader interpretation of federal law — the Employee Retirement Income Security Act of 1974 — “could potentially allow employers in the same line of business anywhere in the country to join together to offer health care coverage to their employees.”
As a result, it said, “workers could have access to a broader range of insurance options at lower rates in the large group market.”
A White House official said that “employers participating in an association health plan cannot exclude any employee from joining the plan and cannot develop premiums based on health conditions” of individual employees.
But state officials pointed out that an association health plan can set different rates for different employers, so that a company with older, sicker workers might have to pay much more than a firm with young, healthy employees.
“Two employers in an association can be charged very different rates, based on the medical claims filed by their employees,” said Mike Kreidler, state insurance commissioner in Washington.
Trump also directed the secretaries of the Treasury, labor and health and human services to find ways of expanding access to “short-term limited duration insurance.” And the White House said that such insurance “is not subject to costly Obamacare mandates and rules.”
Short-term policies could be particularly useful to people in counties where only a single insurer is offering plans in the Affordable Care Act marketplace, the White House said.
“In 2018,” it said, “more than 1,500 counties — nearly 50 percent of all counties — are projected to have only one option on their individual insurance exchanges.”
Another part of Trump’s order indicates that he may wish to crack down on the consolidation of doctors, hospitals and other health care providers, a trend that critics say has driven up costs for consumers. Trump said that administration officials, working with the Federal Trade Commission, should report to him within 180 days on federal and state policies that limit competition and choice in the health care industry.