President Trump signed an executive order on Thursday intended to allow small businesses and potentially individuals to buy a long-disputed type of health insurance that skirts state regulations and Affordable Care Act protections.
The White House and allies portray the president’s move to expand access to “association health plans” as wielding administrative powers to accomplish what congressional Republicans have failed to achieve: tearing down the law’s insurance marketplaces and letting some Americans buy skimpier coverage at lower prices. 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 such health plans will 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.
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.”
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.