Frustrated by congressional gridlock and endless reports of massive premium hikes for the coming year, President Trump Thursday signed an executive order that utilizes the free market to give struggling Americans more and cheaper health care options until lawmakers come up with something permanent.
The executive order directs the Department of Labor to allow the creation of association health plans, or AHP’s, which give the green light for Americans to pool resources and negotiate better rates for premiums, deductibles, and co-payments. It also suggests current law can be interpreted to allow for the purchasing of health coverage across state lines.
Free market health policy experts have been pushing these policies for years as a way of leaving the power and flexibility with the people rather than force everyone onto government-approved plans. Galen Institute President Grace-Marie Turner says President Trump just couldn’t wait any longer for Congress to move.
“Clearly, the president is using the authority he has under existing law to give people relief from Obamacare. Congress has tried and has not yet succeeded in getting actual legislation passed,” said Turner, who expects the GOP-controlled Congress to try again on health care early next year.
But even as Trump signed the executive order to advance conservative policy goals, critics on the right and the left publicly question whether he can do that unilaterally or whether that sort of change can only come through an act of Congress.
Turner is confident that Trump is on solid constitutional ground.
“This is legal. They have to go through a rule-making procedure in order to be able to propose the rule, get public comment, then go to the final rule. Then it will be awhile before it can be implemented. So this is not going to be something that’s implemented overnight,” said Turner.
She is hopeful that at least some aspects of the executive order can be in place by the start of 2018.
Turner is bullish about several options afforded to Americans through the executive order, staring with association health plans, which she says are a great alternative to those trapped in the Obamacare exchanges.
“As we know, many people say those (Obamacare) plans are so generous and so rich that they just can’t afford the premiums. This will allow people to purchase policies that fit them better and can aggregate people across state lines,” said Turner.
Another area of relief could be Trump’s expansion of low cost short-term limited duration insurance, or STLDI.
“The Obama administration limited these policies to simply three months, a one-time purchase. What that meant is that if somebody was in a transition between jobs and they wanted to keep their health insurance and they’ve taken a year to find a new job, then they could be without health insurance for three or four months or longer,” said Turner.
The Trump version of STLDI would last one year.
The executive order also offers greater flexibility in the use of Health Reimbursement Arrangements, or HRA’s.
“They’re sort of like Health Savings Accounts, but run by employers and allow people to use those deposits to purchase their own health insurance,” said Turner.
“The way that might work is if two people, a husband and wife, both have the offer of health insurance at work, they can decide which policy they want as a family policy. Then the other person could contribute to the premium out of their Health Reimbursement Arrangement or use that money to pay deductibles or co-payments,” said Turner.
Watching insurer after insurer announce major premium increases in the individual market exchanges is forcing the issue here. Turner says Trump had to act.
“Without this, we are going to see uninsured rates rise. We’ve got to give people relief,” said Turner.
Turner says the renewed flexibility patients will have in deciding what their plans cover will invariably lead to lower premiums. While the price drop will vary from state to state, Turner is confident many people could see premium reductions of 20 percent or more.
Democrats are hammering the executive order as a terrible idea that will lower the quality of coverage and still leave Americans with steep premiums. Turner says the status is simply no longer an option.
“They’re saying, ‘Oh, this is going to destabilize the pools and all the younger, healthy people are going to join these plans and they’re going to leave the exchanges.’ The exchanges are collapsing anyway. They’re being pushed out of Obamacare,” said Turner.
“People who don’t get subsidies are getting hammered by Obamacare because they can’t afford the policies. You just can’t have premiums continuing to go up 20 and 30 percent a year. Right now people are paying more for their health insurance in many cases than they’re paying for their rent or their mortgage.
“That is not sustainable so they’re desperate for relief and this is going to help the people who are not getting subsidies,” said Turner.
“We’ve got to give tens of millions of struggling Americans help. This is a step in that direction,” said Turner.