Trump seeks to broaden health insurance options through executive order

(Photo: Shutterstock)

(Photo: Shutterstock)

In the past 24 hours, President Donald Trump has issued two significant orders centered on healthcare. The first was the issuance of an executive order that could allow small businesses and individuals to purchase insurance through association health plans, which would be sold across state lines and not have to conform to Affordable Care Act (ACA) regulations.

The order would also increase the use of “short-term” policies, which are often used by people who are between jobs. These policies also do not need to conform with ACA policies such as covering people with pre-existing conditions, but are currently limited to three months in use. The order could extend the effective timeframe of these policies to 8 months or more.

Secondly, late Thursday night, Trump directed the Department of Health to stop making subsidy payments to health insurers immediately. These payments, estimated to be about $7 billion this year, have been used by the government to help keep premium costs lower for low and middle income people who receive government subsidies.

This development is not likely to have any additional impact on insurance costs this year as 2018 plans under ACA have already been finalized (open enrollment begins Nov. 1), although many insurers built in to their pricing an expectation that these payments would stop this year. For instance, according to Salon, California plans included a 12.5% surcharge for silver plans to cover this shortfall.

The American Trucking Associations praised the executive order for association health plans.

“After laying out the case for how tax reform benefits our industry, today President Trump is taking substantive action to improve the lives of millions of Americans, including the 7.5 million employed in trucking-related jobs,” said ATA President and CEO Chris Spear. “By allowing people to pool together to purchase health insurance plans that are sponsored by larger associations and groups, the administration is helping to lower health care costs and improve access.”

Critics of the association approach point to the non-compliance with ACA requirements, potentially allowing for plans that cover fewer condition and include higher co-pays or deductibles. While they presumably would cost less, it is believed they will attract healthier people from the ACA exchanges, leaving those exchanges with a sicker population and driving up costs for those people.

Spear sees smaller trucking companies benefiting from this, though.

“Most trucking companies are small businesses, with nine in ten carriers having fewer than six trucks.  The types of plans the President announced today will allow those companies to pool resources and offer affordable health care options that meet the needs of their employees,” Spear said.

According to the New York Times, employees at larger companies may benefit from the order allowing large employers to offer pre-tax money for employees to buy their own insurance.

Experts say that the executive order may take 6 to 8 months before all the details are worked out and it takes effect.