Today, President Donald Trump, citing inaction from Congress, has signed an executive order related to health care. While the action comes before open-enrollment for the Affordable Care Act (ACA) marketplaces begins on November 1, it is unclear how much of an impact this order could have since federal agencies will likely need to follow rulemaking and public comment procedures.
The executive order covers a variety of areas, including association health plans (AHPs). These plans allow groups of small businesses that have joined together to buy health insurance. Forming a group gives them more leverage and purchasing power as they try to access cheaper premiums for their members. Prior to the ACA, these associations could pick which states’ insurance rules to follow. This resulted in cheaper plans that had fewer benefits, making them better for employers with young and healthy employees who preferred the limited plans while putting employers with less healthier groups at a disadvantage. However, with the ACA, these rules changed and association health plans were then treated as small businesses, which are required to cover all the benefits mandated in the law.
Today’s executive order directs to the Secretary of Labor to expand access to AHPs. The order instructs federal agencies to look at proposing rules or guidance that would loosen the current restrictions on this type of plan. This could possibly exempt these plans from requirements in the Affordable Care Act, such as covering certain essential health benefits. The agencies could also allow individuals, not just small businesses, may also be able to join these associations.
In addition, the executive order also aims to expand the availability of short-term insurance plans. Short-term insurance plans, which are not subject to many ACA regulations, often offer less benefits and are designed for people who need a more temporary fix, such as those who may be between jobs or are no longer eligible for their parents’ health insurance plan. Previously, short-term insurance had been allowed to last up to 364 days, but the Obama administration had ruled that short-term insurance cannot last longer than three months.
Other actions included in the order are:
- Increasing the ability of employers to use pretax dollars in health reimbursement arrangements
- Commissioning a study of ways to limit consolidation within the insurance and hospital industries
- Directing agencies to explore ways to increase competition in the health care market
The White House sees this executive order as an effort that will increase health care choices. The administration is citing concerns over rising costs and limited options as reasons for taking these steps which the Presidents says will cover a large percentage of individuals. Remarks from the director of the White House’s Domestic Policy Council indicate that this order is the “beginning” of actions intended by the administration, but that President Trump remains committed to fulfilling his campaign promise to repeal Obamacare.
However, the executive order has been meet with push back. Critics of the order argue that this could result in more plans with limited coverage, pulling healthy people out of insurance markets that are already struggling. They argue that the effects of this order could include higher costs and more insurers leaving the marketplaces. Questions have also arisen over whether this action will lead to lawsuits challenging the legality of the order.
Full text of the executive order is available here.