Executive order eases rules on Obamacare
Action instructs agencies to loosen insurance rules
President Donald Trump said his move would improve choice and offer cheaper health care options, but critics say that will come at the expense of millions of sicker Americans.
WASHINGTON — President Donald Trump moved Thursday to scale back rules on health insurance across the country in the administration’s most ambitious effort to use its regulatory powers to undermine the Affordable Care Act.
The new executive order Trump issued aims to open the way for a greater number of relatively cheap health plans that could offer skimpier coverage than allowed under the health care law, often called Obamacare.
The broadly worded order leaves many key elements of the new plans uncertain, however, and subject to a lengthy administrative process, which means the order’s impact will remain unclear. The new plans won’t be available for this year’s open enrollment season and many months to come.
Trump avoided making that point as he released the order at the White House, declaring that it would “provide millions of Americans with Obamacare relief” and would “increase competition, increase choice and increase access to lower-priced, high-quality health care options.”
“People will have great, great health care,” Trump added, speaking to an audience made up of Cabinet officials, Vice President Mike Pence, Sen. Rand Paul, R-Ky., and owners of several small businesses the White House said would benefit by the new plans.
While loosening consumer protections in the ACA might make insurance cheaper for those in good health, however, that would happen at the expense of millions of sicker Americans, who’ll have to pay more, according to patient advocates, state regulators and others across the health care sector.
“Today’s executive order jeopardizes the ability of millions of cancer patients, survivors and those at risk for the disease from being able to access or afford meaningful health insurance,” said Chris Hansen, president of the American Cancer Society’s advocacy arm.
The president’s moves, which come after congressional Republicans repeatedly failed to roll back the 2010 health care law this year, also renewed fears that Trump is determined to deliberately destabilize insurance markets and weaken Obama’s signature domestic policy achievement.
The administration has already taken steps to undermine those markets, including sharply cutting federal support for efforts to enroll people in marketplace coverage next year.
The ACA imposed new requirements on insurers, prohibiting them from turning away sick consumers or placing annual and lifetime limits on medical coverage, something that was once commonplace, and mandating a basic set of benefits. Those include coverage of prescription drugs, maternity care and mental health treatment.
Trump’s executive order directs federal agencies to develop new rules that would allow insurers to bypass some of these requirements through alternative kinds of insurance plans.
How effective the new plans will be at lowering costs for some — and how much of a threat they pose to the marketplaces — will depend on how aggressively the agencies act in writing those new rules. They face constraints from existing federal laws, and their new rules could draw challenges in court.
Trump’s new proposals include expanded use of short-term plans, which don’t have to meet the insurance protections in the ACA.
The Obama administration issued rules that prohibited consumers from buying these plans for more than three months.
But the Trump administration is proposing to allow people to remain on these plans longer and renew them.
And the order calls on federal agencies to look at how consolidation among hospitals, doctors and other providers may be driving up costs in some markets around the country.
Backers of association health plans argue they give small employers and individuals the ability to get cheaper coverage.
On Thursday, the head of the National Restaurant Association praised Trump’s order.
“By allowing small businesses and individuals to join together to access health insurance through their association memberships, President Trump’s executive order provides more opportunity for Americans to purchase affordable health care coverage,” Dawn Sweeney said.
Administration officials said that new associations would be subject to some of the ACA’s health insurance requirements.
But association health plans historically have also been a way to circumvent state insurance regulations. And they could avoid mandates in the current law requiring plans to cover a basic set of benefits.
“People were unfortunately very susceptible to junk insurance” in the past, said Karen Pollitz, an insurance market expert at the nonprofit Kaiser Family Foundation.
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.