Trump signs order for new ways to get insurance and undercut Obamacare

Thursday, 12 October 2017, 11:15:23 PM. With today's action, President Trump is methodically dismantling the Affordable Care Act after Congress failed to, critics charge.

WASHINGTON -- President Trump this morning will sign an executive order designed to give employers more options for the health insurance they provide to workers while getting around Obamacare rules.

For the Republican president, this means a chance for Americans to get less expensive health coverage and for companies, particularly small ones, to face fewer cumbersome rules. But Affordable Care Act advocates say it would mean higher deductibles and co-payments for patients and potentially less coverage -- or none at all -- for certain medical conditions.

While some patients still could get insurance under the ACA, Trump's action could upend the healthy-to-sick patient ratio and the balancing of costs in current ACA plans. It could leave ACA plans with fewer healthy enrollees and higher costs, potentially leading to collapse of ACA insurance policies.

Trump has made clear he is attempting what Republicans in Congress failed to do. He is using his executive powers because legislative attempts to repeal and revise the ACA have failed.

"I think this is really about how you can create the conditions under which all the things that went into the Affordable Care Act fall apart," said Loren Anthes, a health policy analyst at the Center for Community Solutions, a Cleveland-based think tank.

"If you want the ACA marketplace to fail," he added, "you can do that through association health plans."

Trump's executive order comes just as private companies and Americans insured in ACA marketplace plans prepare to enroll before the end of the year for 2018 coverage. His order should not directly affect enrollment, however. The actions he seeks must be reviewed first by federal agencies and could be subject to lengthy rule-making procedures.

Specifically, Trump is:

  • Ordering the secretary of labor to "consider expanding access to Association Health Plans (AHPs), which could potentially allow American employers to form groups across state lines." This could "potentially allow employers in the same line of business anywhere in the country to join together to offer health care coverage to their employees," a White House fact sheet said.
  • Directing the departments of Treasury, Labor, and Health and Human Services to "consider expanding coverage through low cost short-term limited duration insurance (STLDI). This insurance "is not subject to costly Obamacare mandates and rules," the White House said, but it "typically features broad provider networks and high coverage limits."
  • Directing the departments of the Treasury, Labor, and Health and Human Services to "consider changes to Health Reimbursement Arrangements (HRAs) so employers can make better use of them for their employees."

Employers put money into HRAs so employees get reimbursed for out-of-pocket health care expenses, including deductibles and copayments. This can reduce overall employer costs, because companies typically pair the HRAs with higher-deductible, less expensive insurance coverage.

The money put into HRAs is not considered taxable income for the employee.

Trump's latest effort comes after his order last week allowing companies to drop birth control coverage -- which under the ACA most were required to provide -- if they have moral objections. The Trump administration has also dramatically cut public outreach and marketing budgets that are supposed to help Americans enroll in ACA marketplace plans for 2018.

Association health plans could be attractive to employers, who could band together and use their combined size to expand their coverage pools. By balancing out their risk, they could get better prices. And the White House said employers could not exclude any employee from joining or develop premiums based on health conditions. 

But in bypassing other ACA rules, an Association Health Plan could offer fewer essential health benefits, now generally defined federally as a full suite of coverage, from routine exams to care for complex diseases without lifetime caps on benefits. And by selling across state lines, they could choose to base the plan in a state with the weakest patient and consumer protections, critics warn.

Anthes said Kentucky had a number of association health plans in the 1990s with low premiums and high deductibles. Healthy people in those plans didn't care about the out-of-pocket costs because they seldom needed health care and they enjoyed the low premiums. But for sicker patients, the costs were considerable.

On hand to witness the president signing the executive order were business owners including franchisees of IHOP, Taco Bell, Sports Clips and Jersey Mike's stores, the WhiteHouse said.

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