In issuing an executive order on the Affordable Care Act, Trump has done something he’s frequently talked about: using association health plans to establish a new class of lightly regulated insurance.
The leaked EO reveals, according to Andy Slavitt—who, according to his Twitter page, ran Medicare, Medicaid and the ACA for former President Obama—a plan that is designed to undermine the ACA and is “Long on propaganda [sic]. Short on details. Plenty of sabotage.”
Among its provisions are the direction to the Secretary of Labor to consider expanding access to AHPs to “potentially allow American employers to form groups across State lines” to give workers access to “a broader range of insurance options at lower rates in the large group market” and also allows access to short-term limited-duration insurance, which is not subject to ACA regulations.|
Individuals might be allowed to join these AHPs as well, which could siphon younger, healthier people away from the ACA and cause the system to collapse from within. In effect, there will be two tiers of insurance in the country.
Under the Obama administration, according to Slavitt, short-term limited-duration insurance policies were limited to 3 months’ duration; under the EO, they are not—and they’re also not subject to ACA requirements for essential benefits such as mental health coverage, maternity care and full prescription coverage; medical loss ratio requirements; or protections. People can be charged higher premiums or denied coverage for preexisting conditions.
The impact of the EO is likely to be rising premiums for exchange plans, an exodus of customers (at least healthy ones) from the exchanges to STLDI policies and destabilization of the marketplaces as insurers also exit.
Funds from “health reimbursement arrangements” will be able to be used for any medical expenses, another change from the ACA.
The EO also commissions a study of ways to limit consolidation within the insurance and hospital industries and directs agencies to find additional ways to boost competition and choice in health care to improve its quality and lower its cost.
According to the Washington Post, the Society of Actuaries has condemned the order, saying in a statement: “Healthier consumers will likely be able to enroll in plans with lower insurance rates, while more medically complex consumers may be subject to significant rate increases. Further, there will likely be an increase in solvency risk for association health plans, contributing to market instability.”
Andrew Bremberg, director of the White House’s Domestic Policy Council, was cited in the report saying that the president’s order is merely the “beginning” of actions the administration intends to take unilaterally on the ACA.