Trump Health Care Executive Order

October 11, 2017

President Donald Trump is planning to sign an Executive Order (EO) on health insurance, including language similar to past iterations of Association Health Plans (AHPs), designed to give more options to healthy consumers. The order, expected to be signed this week, will begin rolling back some requirements of the Affordable Care Act and could allow insurers to offer the kinds of lower-cost, less-comprehensive plans that many believe were restricted by the 2010 health law.

A Trump administration official who previewed the order said it is aimed at promoting competition and choice in the health-care markets. One result, analysts said, could be that healthy people are drawn to the expanded, less-expensive plans, leaving sicker and higher-risk people in a dwindling pool that sees higher costs.

The EO is expected to include broad instructions for federal agencies to loosen rules on health plans that the administration says have driven up premiums and reduced insurance offerings available to people who buy coverage on their own or who work for a small employer.

The order also will direct the Health and Human Services, Labor and Treasury Departments to lay the groundwork for the growth of AHPs, coverage that would have fewer mandated benefits than many current plans available to small employers and individuals. The departments, in addition, will be told to take steps to expand the availability of short-term medical plans that had been curbed by the Obama administration.

The order will begin the reversal of the Obama Administration’s stance that health insurance sold to people who don’t get coverage through a large employer had to be more tightly regulated by the federal government, with mandated packages of benefits and requirements that health plans be offered to and priced equally for everyone regardless of medical history.

For NSBA, the most concerning aspect of President Trump’s order likely will be the move toward expanding the use of AHPs, something NSBA traditionally has opposed, which would be treated more like the policies now offered by large employers with workers in different states. These policies would be available to small employers that want to band together to offer coverage that wouldn’t be subject to the full range of ACA requirements, such as the mandated package of benefits. Under previous AHP proposals, while some small businesses could see cost savings, many could be priced out of the market altogether.

The president also is set to order federal agencies to start winding back an Obama-era rule curbing coverage known as “short-term medical insurance,” a low-cost but limited-protection option, and to allow people to once again buy plans in that category that could last for almost a year. Such plans, which can now only be carried for 90 days, often are sold only to people who qualify as healthy and don’t cover costs related to enrollees’ pre-existing conditions. They also can cap payouts and often don’t include benefits required of ACA plans, such as prescription-drug coverage.

If restored, analysts said, the more extensive short-term plans would again become more appealing to healthier customers seeking cheap alternatives to ACA plans, while higher-risk people would remain in traditional insurance coverage.

Ahead of the signing of the final version of the EO, several key details remained undefined and questions remain in particular around the rules on AHPs. But the combined result of the approach, some analysts said, could be to usher in broad changes to the business of selling health coverage to small employers and maybe individuals.