The order broadly tasks the administration with developing policies to increase health care competition and choice in order to improve the quality of health care and lower prices.
However, it could also destabilize Obamacare by siphoning out younger and healthier Americans from the exchanges.
The order, Trump said from the Roosevelt Room of the White House, would give “millions of Americans with Obamacare relief.” It would “cost the United States government virtually nothing and people will have great great health care. And when I say people, I mean by the millions and millions.”
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 said 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.
Still needs Congress
Trump’s efforts with congressional Republicans to repeal and replace the Affordable Care Act have floundered after analyses of the GOP replacement plans showed the number of Americans without insurance would increase by more than 20 million people, as compared to current law.
Democrats railed against Trump’s move, saying it would hurt the current health care markets.
“Having failed to repeal the #ACA in Congress, @POTUS is using a wrecking ball to singlehandedly rip apart & sabotage our healthcare system,” Senate Minority Leader Chuck Schumer, D-New York, tweeted.
“This is a case where doing something is worse than doing nothing,” Ezekiel Emanuel, an oncologist and one of the architects of Obamacare, said on CNN. “It’s not going to solve the problem at all and remember, it effects a very small number of people.”
“It won’t do anything for a lot of the people on the exchange who are not members of franchises or trade associations,” Emanuel said. “So this is more show than actual reality in terms of making health care affordable for Americans.”
What the order may do
Exactly how the agencies would change current regulations remains to be seen.
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.
This story has been updated.