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Date TimeOctober 12, 2017
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President Trump signed an executive order on Thursday intended to circumvent the Affordable Care Act by making it easier for individuals and small business to buy different types of health plans with lower prices but also fewer benefits and protections.
The White House and allies portray the president’s move as wielding administrative powers to accomplish what congressional Republicans have failed to achieve: tearing down the law’s insurance marketplaces. The order represents Trump’s biggest step to carry out a broad but ill-defined directive he issued his first night in office for agencies to lessen ACA regulations from the Obama administration.
Critics, who include state insurance commissioners, most of the health-insurance industry and mainstream policy specialists, predict that a proliferation of other types of coverage would have damaging ripple effects: driving up costs for consumers with serious medical conditions and prompting more insurers to flee the law’s marketplaces. Part of Trump’s action, they say, will spark court challenges over its legality.
The most far-reaching element of the multi-prong order instructs a trio of Cabinet departments to rewrite federal rules for so-called association health plans — a form of insurance in which small businesses of a similar type band together through an association to negotiate health benefits.
The order also is designed to expand the availability of short-term insurance policies, which offer limited benefits meant as a bridge for people between jobs or young adults no longer eligible for their parents’ health plans. The Obama administration ruled that short-term insurance may not last for more than three months; Trump wants to extend that to nearly a year.

Trump signs order to eliminate ACA insurance rules, undermine marketplaces - Washington Post

In addition, Trump’s action is intended to widen employers’ ability to use pretax dollars in “health reimbursement arrangements” to help workers pay for any medical expenses, not just for health policies that meet ACA rules — another reversal of Obama policy.
Other aspects of the order are less specific: commissioning a six-month study, to be led by federal health officials, of ways to limit consolidation within the insurance and hospital industries; and directing agencies to find additional means to increase competition and choice in health care to improve its quality and lower its cost.
In a late-morning signing ceremony in the White House’s Roosevelt Room, surrounded by supportive small business owners and a few Republicans from Capitol Hill, the president spoke in his characteristic superlatives about the effects of his action and what he called “the Obamacare nightmare.”
Trump said that Thursday’s move, which will initiate months of regulatory work by federal agencies, “is only the beginning.” He promised “even more relief and more freedom” from ACA rules. And while leading GOP lawmakers are eager to move on from their unsuccessful attempts this year to abolish central facets of the law, he said: “We are going to pressure Congress very strongly to finish the repeal and replace of Obamacare.”
In one sense, the executive order will fulfill a quest by conservative Republicans, especially in the House, who have unsuccessfully sought for more than two decades to expand the availability of association health plans, allowing them to be sold, unregulated, across state lines. On the other hand, this approach conflicts with what Trump and GOP leaders in Congress have held out as a main health-policy goal: giving each state more discretion over matters of insurance.
 Health policy experts in think tanks, academia and the health-care industry pointed out that the order’s language is fairly broad, so that the ensuing fine print from agencies’ ruleswill determine whether the impact will be as sweeping or quick as Trump has boasted.
“It’s going to cover a lot of territory and a lot of people, millions of people,” the president said two weeks ago. On Tuesday, he added: “It will be great, great health care for many, many people.”



The action comes three weeks before the Nov. 1 start of the fifth open-enrollment season in ACA marketplaces for people who do not have access to affordable health benefits through a job. The president predicted that about half of the nation’s counties will have just one insurer in their exchange and “many will have none.” The most recent canvass shows that all of the counties that were at risk of no ACA health plans for the coming year have now solved that problem.
A senior administration official, speaking to reporters on the condition of anonymity before Trump signed the order, said that the policy changes it sets in motion will require agencies to follow required procedures to write new rules and solicit public comment. That means new insurance options will not be available in time for coverage beginning at the start of 2018, he said.
Even so, with a shortened sign-up period and large cuts in federal funds for advertising and enrollment help already hobbling the marketplaces, “if there’s a lot of hoopla around new options that may be available soon, it could be one more thing that discourages enrollment,” said Larry Levitt, Kaiser Family Foundation’s senior vice president.
The National Association of Insurance Commissioners (NAIC) is among the groups that have long opposed any expansion of coverage that bypasses state regulation. In congressional testimony in February, the NAIC said allowing health plans to be sold without requiring either state licenses or federal approval “would result in less protections for the most vulnerable populations and the collapse of individual markets.”
Under the president’s order, association health plans will be able to avoid many ACA rules, including the law’s benefits requirements, limits on consumers’ yearly and lifetime costs, and ban on charging more to customers who have been sick. Critics warn that young and healthy people who use relatively little insurance will gravitate to those plans because of their lower price tags, leaving older and sicker customers concentrated in ACA marketplaces with spiking rates.
“It would be different pools under different rules,” said one senior health policy source who spoke on the condition of anonymity since the order was not yet public.
Currently, short-term health insurance makes up a tiny fraction of the policies sold, with fewer than 30 companies covering only about 160,000 people nationwide at the end of last year, according to NAIC data.
Experts could not point to figures for how many association health plans exist or how many people they insure. Such arrangements have existed for decades, and scandals have on occasion exposed “multi-employer welfare arrangements” started by unscrupulous operators who took members’ money and either did not have enough reserves to cover hospital bills or absconded with premiums.
The National Federation of Independent Business, the small-business lobby, has pressed Congress to allow use of association plans, arguing that they can be less expensive and give workers more insurance choices. Sen. Rand Paul (R-Ky.) has promoted the idea and stood just behind Trump at the morning ceremony. After nearly walking out of the room without signing the order, the president returned to affix his bold signature to the document and then hand Paul the pen.

Selling health plans from state to state without separate licenses — the idea underlying much of the president’s order — has long been a Republican mantra. It has gained little traction in practice, however.
Before the ACA was passed in 2010 as well as since then, half a dozen states have passed laws permitting insurers to sell health policies approved by other states. And since last year, the ACA has allowed “compacts” in which groups of states may agree that health plans licensed in any of them could be sold in the others. Under such compacts, federal health officials must make sure the plans offer at least the same benefits and are as affordable as those sold in the ACA marketplaces.
As of this summer, “no state was known to actually offer or sell such policies,” according to a report by the National Conference of State Legislatures. A main reason, experts say, is insurers’ difficulty in arranging networks of doctors and other providers of care far from their home states.
What the president has in mind is different in important ways. Association health plans no longer will have to be licensed by a state in which they are sold, and they will not need approval under ACA rules, though a senior administration official says they will still need to meet requirements for all types of insurance. In addition, individuals will potentially be able to join associations — not just small businesses. The officials also said rules might be loosened so that small business could come together for the sole purpose of buying insurance — something now not allowed.
The prospect of letting individuals be part of these associations is the aspect of the executive order likely to draw legal complaints. The 1974 ERISA law, which permits large companies that insure themselves to do so with relatively little federal regulation, could be reinterpreted to apply to small businesses that band together, according to health policy experts familiar with the law.
But ERISA does not apply to individuals buying coverage on their own. A senior administration official said such plans might become available to some individuals, such as ones who are self-employed.

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