Fed up with failed attempts in Congress to repeal the Affordable Care Act, President Trump on Thursday took matters into his own hands, signing an executive order that could significantly damage the health insurance market and harm millions of people.
Mr. Trump directed his administration to effectively create an alternative health insurance system that does not include the safeguards of the A.C.A. and could sabotage that 2010 law, one of his predecessor’s biggest accomplishments. The president claims that this will help people obtain cheaper insurance. In reality, it most likely will force insurance companies to abandon the A.C.A.’s insurance exchanges and ultimately precipitate a collapse of an important part of Obamacare.
The president is proposing two main changes: to expand the use of short-term insurance policies and to make it easier for professional and trade associations to sell health coverage to members across the country. Officials at the Departments of Health and Human Services, the Treasury and Labor will now come up with a rule after seeking public comment over the next several months.
Let’s start with short-term health policies. The Obama administration put in place rules that the policies could last 90 days and were not renewable. They’re currently meant for people between jobs. Mr. Trump is directing his aides to extend these plans and make them renewable, arguing that because these policies tend to be cheaper, this change could benefit millions of people. Short-term plans indeed cost less than yearlong policies, but that is because they are not as comprehensive. For example, many do not cover maternity care, cancer treatment or prescription drugs. And short-term policies often do not pay for treatment for pre-existing conditions, a signature requirement of Obamacare policies.
Mr. Trump also wants to expand the use of association health plans, which have been around for years but have a terrible track record. These plans typically work by insuring the employees of small and medium-size businesses that have something in common. A national plumbers association, say, might offer a plan to all of its members and their employees. These plans are lightly regulated by the federal government and often face little oversight by states because their beneficiaries are spread out across the country.