Earlier this week, President Trump signed an executive order that could be a first step in dismantling the Affordable Care Act. About 20 health organizations have so far spoken out against the executive order arguing the action could weaken patient protections and destabilize the individual market.
President Trump’s executive order signed on Thursday, Oct. 12, does not implement any policies, but it does request federal agencies such as the Department of Health and Human Services and the Department of Labor to develop regulations to expand the use of association health plans, which allow small businesses to join forces to purchase health coverage together, as well as to expand the definition of short-term insurance, which typically offers less coverage and comes with higher out-of-pocket costs.
The order issues three primary directives to federal agencies:
- Consider ways to expand access to association health plans, potentially allowing employers to purchase insurance across state lines.
- Consider expanding coverage through short-term health insurance plans, which are not subject to the Affordable Care Act’s regulations such as minimum coverage requirements.
- Consider changes to health reimbursement arrangements (HRAs) — employer-funded accounts that reimburse workers for healthcare expenses — to allow employers to make better use of them.
During a press conference, President Trump said expanding use of association health plans would increase competition and allow more small businesses to have the same purchasing options as larger employers. He said he also plans to eliminate the three-month limit on short-term health insurance plans.
“The Medical Association is in the process of reviewing the President’s Executive Order and is consulting with industry experts to get a full understanding of the downstream effects the order will have on patient care. There is some concern that the order could erode important patient protections, which would be a serious issue however the true impact is unclear at this point,” Executive Director Mark Jackson said.
The executive order does not make policy changes itself, any new rules will go through a notice and comment period that could take months.
In a decision that coincided with the executive order, the White House has confirmed that it will stop federal payments for cost-sharing reductions to health insurers. These payments help insurers pay out-of-pocket costs for low-income individuals purchasing coverage through the exchanges. If stopped, premiums could dramatically rise and cause insurance companies to leave the exchanges and challenge the decision in court. There’s confusion as to when the payments, which could total about $9 billion this year, would end.