WASHINGTON -- President Trump today signed an executive order designed to give employers more options for providing health insurance 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 band together and face fewer cumbersome regulations. But Affordable Care Act advocates say it could mean higher deductibles and co-payments for patients and potentially less coverage -- or none at all -- for patients with certain medical conditions.
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.
"Should have been done a long time ago, and it could have been done a long time ago," the president said at a signing ceremony in the White House Roosevelt Room.
Business groups praised the president's action, saying the ACA has made insurance too expensive, particularly for small employers, and imposed too many rules. A number of congressional Republicans agreed, with U.S. Rep. Jim Jordan, a conservative Ohioan, saying Trump "is doing what voters sent him here to do."
But House Democratic leader Nancy Pelosi said Trump engaged in "executive sabotage." U.S. Sen. Sherrod Brown, an Ohio Democrat, said Trump used "backdoor tactics meant to undermine important health care protections." And some health policy analysts warned that Trump's executive action could have a twofold negative effect.
First, it could let insurance carriers that will serve multiple employers across the country adopt weaker standards -- and refuse to cover as many health conditions -- than those now required in the ACA.
People "who purchase cheap plans are likely to discover their coverage is inadequate when an unexpected health crisis happens, leaving them financially devastated and costing the health care system more overall," said Chris Hansen, president of the American Cancer Society Cancer Action Network.
In turn, if more small employers wind up providing insurance through these plans, or if self-employed individuals can also join, it could change the mix of patients who buy the ACA's marketplace plans -- the policies that people buy, often with tax subsidies, through HealthCare.gov.
While the ACA requires most employers to provide coverage already, they face no penalties for failing to do so if they have fewer than 50 workers. Their employees can simply sign up for an ACA marketplace plan.
But if companies and the self-employed find group coverage more affordable through Trump's action, their decisions could change -- and so could the enrollment mix in the ACA marketplace after those small-business employees leave.
"It turns the marketplace into a de facto high-risk pool," said Loren Anthes, a health policy analyst at the Center for Community Solutions, a Cleveland-based think tank. With sicker enrollees and fewer people overall to balance out premiums, the marketplace could fail, ACA advocates say.
This would be consistent with Trump's desire and campaign goal to upend the ACA, which he called "a disaster" again today.
The U.S. Chamber of Commerce, a major business lobby, said Trump is taking a necessary step.
"The small group health insurance market remains volatile, hamstrung by few choices and increasing premiums," said a statement from Randy Johnson, the chamber's senior vice president for labor, immigration and employee benefits. "Businesses -- especially small businesses -- continue to struggle to provide health care coverage that their employees value and can afford. We appreciate the administration's efforts to expand access to more coverage options, lower premiums and offer greater benefit flexibility."
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, although it could cause confusion. The actions he seeks must be reviewed first by federal agencies within the next 60 days and then could take time to implement with new regulations. And some Trump critics noted that the president ordered his administration to "consider" certain things but did not actually direct it to do more.
Specifically, Trump:
- Ordered 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.
- Directed 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."
- Directed 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 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 most were required to provide under the ACA -- 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 depending on how the rules are developed, an association plan might be able to bypass other ACA restrictions. For example, the ACA requires coverage for routine exams, vaccinations, mental health and substance abuse treatment and care for complex diseases without lifetime caps on benefits. Trump's executive order apears to leave open the possibility that association health plans could get around those requirements.
That might save employers money. But it could leave employees with coverage in "garbage insurance" plans, as Brad Woodhouse, a longtime Democratic operative and director of the Protect Our Care Campaign, put it.
And by selling across state lines, association plans could choose to base themselves in a state with the weakest patient and consumer protections, critics warn. The ACA already allows insurers to sell across state lines, but doing so has proved to be undersirable because of varying state regulatory schemes and the difficulty of putting together multi-state networks of doctors and hospitals.
In theory, small-company demand could spark more interest in multi-state plans. But even if not, association health plans that form in just a single state could be problematic from some patients' perspective, health policy analysts say.
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.
The debate over the ACA, passed in 2010 when Democrats held majorities in Congress, has always focused on winners and losers. Millions of people gained more affordable and fuller coverage, partly because of the rules on what policies must cover and partly because of the tax subsidies the ACA provided for many buyers.
But many people who didn't qualify for subsidies saw premiums rise dramatically, and others complained they should not have to pay for coverage they would never use. Along with a majority of Republicans, they cast the ACA in a different light: that of a vast and failed social experment. Republicans were unable to repeal it even with their congressional majorities because of squabbles in the Senate, where a defection of just a few GOP members meant they no longer had the votes.
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.