What You Need to Know About Trump’s Executive Order on Health Care


October 12, 2017

President Trump on Thursday took his biggest step yet toward accomplishing what Congress could not: dismantling the Affordable Care Act.

October 12, 2017

President Trump on Thursday took his biggest step yet toward accomplishing what Congress could not: dismantling the Affordable Care Act.

Saying he was starting the process of Obamacare repeal, Trump signed an executive order that he and his allies say will provide more options and lower costs in the health care market. “We are going to also pressure Congress very strongly to finish the repeal and the replace of Obamacare once and for all,” the president added.

Here’s what you need to know about the executive order (which Trump nearly forgot to sign) and its anticipated effects.

What the Executive Order Does:

It instructs federal agencies to study how to make it easier for small businesses, trade groups and possibly individuals to band together to buy health insurance plans that would be cheaper — and could provide skimpier benefits — than required under Obamacare.

It directs agencies to consider expanding the use of short-term insurance plans — stopgap policies that don't cover pre-existing conditions or offer other costly benefits. Coverage under such plans was limited to three months under Obamacare, but could be extended up to a year.

It also direct agencies to expand so-called Health Reimbursement Arrangements, employer-funded accounts that use tax-free money and repay workers for health care expenses.

What It Means:

Analysts warn the executive order could sabotage Obamacare markets by drawing younger and healthier Americans away from the individual exchanges, leaving older and sicker enrollees facing costs that spiral higher and higher. “Likely losers with the executive order: People with pre-existing conditions,” the Kaiser Family Foundation’s Larry Levitt tweeted. “Winners: Healthy people (and their small employers), lawyers.”

While President Trump said Thursday that his executive order would cost nothing, analysts warn it is likely to drive up costs for the federal government as premiums for subsidized plans rise due to the deteriorating risk pool.

The executive order will not take effect immediately, and it’s not clear yet how or how quickly the departments of Health and Human Services, Treasury and Labor can implement it. But some experts are predicting severe consequences will come quickly. "Within a year, this would kill the market," Karen Pollitz, a senior fellow at the Kaiser Family Foundation who worked on health care reform at HHS during the Obama administration, told Politico.

“The potential damage to Obamacare rests largely on how far the Trump administration pushes its authority to unilaterally rewrite the rules,” Politico’s Adam Cancryn writes. At issue will be who the administration classifies as an association — the main question is whether self-employed individuals would qualify — and how radically it seeks to reinterpret ERISA, the federal law governing many employee benefits. Legal challenges are likely if the administration pushes the envelope.

The potential benefits of the order are somewhat limited — the administration says tens of millions of Americans may benefit over time — but the potential damage may be broader. "This is a case where doing something is worse than doing nothing," Ezekiel Emanuel, an oncologist who helped craft Obamacare, said on CNN. "It won't do anything for a lot of the people on the exchange who are not members of franchises or trade associations. So this is more show than actual reality in terms of making health care affordable for Americans."

Until federal agencies write new regulations to implement Trump’s order, the health care market will be subject to continued confusion.

Courtesy/Source: Fiscal Times