Earlier today, President Donald Trump signed an executive order on health care that the administration says will “improve access, increase choices, and lower costs for health care.” The order itself is pretty vague and doesn’t actually make any immediate, concrete changes, but rather directs various departments to “consider” both expanding access to association health plans (AHPs) and short-term limited duration insurance and making changes to current regulations around health reimbursement arrangements. As such, the order is unlikely to have major effects on the open enrollment period that’s due to begin on November 1st, although the confusion introduced by the order won’t help enrollment that’s likely already hampered by the Trump administration’s cuts to funding for enrollment outreach and advertising.
So the actual effects of this order will depend on the manner in which the Departments of Treasury, Labor, and Health interpret this order, and the regulatory changes they propose. Let’s start with the bit about expanding access to short-term limited duration insurance. These types of plans are not subject to key Affordable Care Act regulations on coverage for essential health benefits and pre-existing conditions, which means they’re cheap but skimpy and not available to sick people. Pre-ACA, the plans were primarily used by healthy people seeking to fill gaps in coverage, but their use increased after the law went into effect, thanks to the low price tag on the plans. The Obama administration instituted a rule limiting the use of such plans, arguing that they were drawing young, healthy people out of the ACA non-group market risk pools. Republicans have been pushing for a relaxation of the Obama-era rule for a while—14 senators sent a letter to then-Secretary of Health and Human Services Tom Price in June, asking him to reverse an Obama-era rule that limited the duration and use of the plans.
Expanding the use of such plans could definitely threaten the stability of the ACA’s non-group markets—anything that results in young, healthy people leaving the ACA’s individual markets will harm those markets—but the extent of the damage depends a lot on the specifics. For example, if states are still permitted to regulate such plans, the effects in states that do regulate will be muted. Likewise, the executive order is silent on the crucial question of whether people who purchase short-term plans will be exempt from the individual mandate. Such plans are currently not considered insurance for the purposes of the mandate—if that changes, Larry Levitt of the Kaiser Family Foundation points out that the plans “could really take off.”
Similar questions apply to changes with respect to association health plans. The executive order doesn’t specifically direct departments to consider allowing AHPs to market to individuals, a measure that the administration had reportedly considered but that is widely viewed as potentially illegal and likely to provoke lawsuits. If regulatory changes don’t affect self-employed individuals then they may harm the stability of the small business insurance markets, but not the non-group markets. And, again, the executive order is silent on the important question of whether or not states will still be able to bar AHPs from being sold in their states.
The executive order that Trump signed today could be hugely damaging for the ACA’s individual markets across the country, already struggling under the weight of other administration decisions. Or it could have relatively minor effects in blue states, and disastrous effects in red states. The health-care waiting game continues.
