Groups representing physicians, hospitals and patients came out largely in opposition to President Donald Trump’s executive order to encourage the use of insurance plans which don’t comply with Affordable Care Act (ACA) regulations on benefits and covering people with pre-existing conditions.
The order signed by Trump on Oct. 12 focuses on two issues—the first being instructing the U.S. Department of Labor to expand the availability of association health plans, or AHPs. AHPs allow small businesses, trade groups and others to form associations to buy health coverage and the plans would be exempt from ACA requirements like essential health benefits and can vary premiums based on health status, which isn’t allowed in the ACA’s individual and small group markets.
The second part of the executive order focuses on allowing greater use of short-term, non-ACA compliant health plans. The Obama administration had sought to limit use of such plans—which generally offer skimpier benefits for a cheaper price—to three months. The executive order seeks to allow full year short-term coverage.
The result of these two policies would be healthier customers moving out of the ACA marketplace and into short-term plans and AHPs, leaving the exchanges with a sicker, more expensive risk pool. That may lead insurers to exit the ACA markets altogether, leaving some of those sicker customers with no options as the short-term plans and AHPs can discriminate against them based on their health status.
“Our organizations strongly reject a marketplace that allows insurers to discriminate against any individual based on their health status, age or gender,” six physician groups, including the American College of Physicians, wrote in a joint statement. “Allowing insurers to sell narrow, low-cost health plans likely will cause significant economic harm to women and older, sicker Americans who stand to face higher-cost and fewer insurance options.”
More criticism came from the American Hospital Association, which said the order “could destabilize the individual and small group markets.” A coalition of 18 patient groups, including the March of Dimes and the American Lung Association, said Trump’s plans could “price millions of people with pre-existing conditions” out of the individual market and leave healthy people “seriously underinsured” if a health crisis occurs.
There was some support for the plan from conservative circles. Sen. Rand Paul, R-Kentucky, a strong proponent of AHPs, called the order “one of the most significant free market healthcare reforms in a generation.” It was also praised by the American Association of Physicians and Surgeons, a controversial group which has opposed mandatory vaccinations and promoted debunked theories like abortions can cause breast cancer through its medical journal.
Despite the strong opposition, the order isn’t likely to have much immediate impact. The executive order did direct federal agencies, including HHS, to begin the rulemaking process, but any regulation would take months to be proposed. In mean time, a legal challenge to the order is likely to face a legal challenge like what has already been promised in reaction to the Trump administration cutting off ACA subsidies to insurers.
The order does, however, tell insurers that uncertainty around the ACA is likely to continue under the Trump administration.
“Short-term coverage does not offer ‘great value’ or ‘real protection’ to consumers,” wrote Georgetown University professors Dania Palanker, MPP, Kevin Lucia, MPH and Emily Curran, MPH, in a Commonwealth Fund report. “Instead, it puts members at risk and increases premiums for consumers in the individual market. Insurers are already reacting to signs that the Trump administration is not committed to ensuring a robust individual insurance market. Loosening restrictions on short-term coverage will send yet another signal to insurers that the individual market will not be a stable business environment any time soon.”