President Donald Trump took his first steps Thursday toward fulfilling his vow to dismantle Obamacare, signing an executive order that he says will bring affordable health insurance to millions more people.
The order broadly tasks the administration with developing policies to increase health care competition and choice in order to improve the quality of health care and lower prices.
However, it could also destabilize Obamacare by siphoning out younger and healthier Americans from the exchanges.
The order, Trump said from the Roosevelt Room of the White House, would give "millions of Americans with Obamacare relief." It would "cost the United States government virtually nothing and people will have great great health care. And when I say people, I mean by the millions and millions."
Trump said the measures "should have been done a long time ago, and could have been done a long time ago."
Specifically, the President is directing the Labor Department to study how to make it easier for small businesses, and possibly individuals, to join together and buy health insurance through nationwide association health plans, a senior administration official said Thursday. The department could give employers in the same industries more flexibility to offer group coverage across state lines, providing them with a broader range of policies at lower rates.
Separately, the order would allow consumers to buy short-term policies, which don't have to comply with Obamacare's protections for those with pre-existing conditions. Also, it looks to broaden the ability of employers to give workers money to buy their own coverage through health reimbursement arrangements.
The changes could take six months or more to take effect, a senior administration official said.
Critics, however, worry that the order may free these association health plans from several key Obamacare regulations and from state oversight, allowing them to sell plans with lower premiums but skimpier benefits. That could draw younger and healthier customers away from Obamacare and send premiums skyrocketing for sicker people left in the exchanges.
Still needs Congress
Though Congress has shelved its effort to repeal and replace Obamacare, a signature campaign promise for the President, Trump has not let it go. While he cannot wipe away the health reform law with the stroke of a pen, Trump can use executive orders to direct agencies to amend guidance and regulations to broaden how the law is implemented.
Speaking in the Oval Office earlier this week, Trump previewed unilateral action that he claimed would dramatically improve insurance options for Americans, which he said had been limited by Obamacare.
"I will be signing something probably this week which is going to go a long way to take care of people that have been so badly hurt on health care," Trump said Tuesday ahead of a meeting with Henry Kissinger, the former secretary of state. "They will be able to buy across state lines. They will get great competitive health care and it will cost the United States nothing."
Trump first vowed late last month to take executive action to repair aspects of the law, which he has deemed a failure. The plan has drawn backing from lawmakers like Sen. Rand Paul, the Kentucky Republican who has identified specific reforms that could be made by the President alone.
Trump's efforts with congressional Republicans to repeal and replace the Affordable Care Act have floundered after analyses of the GOP replacement plans showed the number of Americans without insurance would increase by more than 20 million people, as compared to current law.
What the order may do
Exactly how the agencies would change current regulations remains to be seen.
Association health plans, which are usually sponsored by trade organizations or interest groups, already exist. Spurred by the executive order, federal agencies could amend the rules governing these plans so they are no longer subject to state regulation, said health policy experts, speaking before the order was issued. Instead, the nationwide plans may come under the same federal oversight as large-employer policies.
Large group plans do not have to adhere to all of Obamacare's provisions, such as the requirement to provide comprehensive policies that cover prescription drugs, mental health and substance abuse, according to Kevin Lucia, project director at Georgetown University's Health Policy Institute.
The switch could also allow association plans to deny coverage to the group or set rates based on the medical history of those in the group, so plans with younger, healthier members could offer lower premiums. The administration said that employers participating in these plans would not be allowed to exclude employees or develop premiums based on health conditions.
The President's action also looks to expand the use of short-term insurance plans. These policies are also not subject to Obamacare regulations so they can exclude those with pre-existing conditions or base rates on consumers' health background. Also, they usually offer less comprehensive coverage.
The Obama administration limited these plans' coverage to 90 days. Previously, they had been available for up to a year.