Executive action expected next week would roll back some Obamacare requirements
WASHINGTON—President Donald Trump will sign an executive order next week to start lifting some insurance rules set by his predecessor’s Affordable Care Act in the aftermath of the failed Republican bid to repeal the law, a senior administration official said Saturday.
The order is aimed at expanding insurance options for Americans who buy coverage on their own or work for a small employer, and would include broad instructions for agencies to explore ways to loosen regulations and potentially lower premiums, as well as looking at three specific areas of health insurance. It has been anticipated by industry officials and political observers in the days since the GOP repeal effort crashed.
Republicans have long contended that the insurance rules set by the 2010 health law, popularly dubbed Obamacare, have driven up premiums in the individual and small group markets, for healthier Americans especially. Democrats and supporters of the law typically counter that the rules have protected consumers from unwittingly buying shoddy products and helped subsidize the costs of sicker Americans.
Mr. Trump will order three agencies, the departments of Health and Human Services, Labor and Treasury, to take steps to make it easier for people to band together and buy insurance through “association health plans,” the official said.
Such plans would in some ways be like large employer’s health plans, subject to some restrictions set by the Affordable Care Act, including a ban on lifetime limits. But they would be free of other regulations, including the requirement that insurance plans cover a set package of benefits. These plans are popular with conservatives; some insurers fear that associations would peel off healthier and younger individuals and leave traditional insurance plans to cover sicker and older customers.
The president also will order the agencies to start winding back an Obama-era rule curbing coverage known as “short-term medical insurance,” a low-cost but limited-protection option, and allow people to once again buy those plans for up to a year, the official said.
The Obama administration banned the sale of those plans that offered coverage for more than 90 days, arguing they were inadequate for people’s needs. Some industry officials have pressed the administration to restore them, saying that when marketed honestly they can fit the needs of particular consumers currently priced out of buying the more generous coverage available as a result of the 2010 health-care overhaul.
In addition, the executive order would order agencies to expand health reimbursement accounts, employer-funded arrangements that employees can use to pay out-of-pocket medical costs and premiums. Obama-era guidance from 2013 had prevented pretax employer dollars in the arrangements from being used to buy health insurance on the individual market.
The three moves would represent the most substantive step the White House has taken to date in paring back Affordable Care Act rules using administrative powers. They don’t go as far as many critics of the law would like but are likely to be followed by other steps, administration officials said.
At the same time, Mr. Trump has signaled that he is interested in working with Democrats to pass a bipartisan health-care deal, and Democrats have responded by proposing their own preferred measures to shore up rickety health-insurance markets, in which rising premiums have hit many of the same people targeted by the executive order.
Mr. Trump tweeted Saturday morning that he had spoken with Senate Minority Leader Chuck Schumer (D., N.Y.) a day earlier to discuss renewing efforts to pass health-care legislation.
Later Saturday, Mr. Trump told reporters as he traveled to North Carolina that he was willing to cut a short-term deal with Democrats to save the health law from collapsing, but “it’s really up to them. [The Affordable Care Act is] exploding, like I said it would.”
But parts of the order may prove contentious enough to undo that effort—chiefly, its directive to the Labor Department to spur the sale of insurance across state lines through the use of association health plans. Health analysts and industry officials also said some of the regulatory changes, once completed, could prompt legal challenges.
The department would likely make changes that effectively expand the scope of the Employee Retirement Income Security Act, or Erisa, which governs the plans operated by large employers with workers in different states. Ahead of the release of the rule, the department had already been examining the law, according to people familiar with the deliberations. In addition, the Treasury Department has been exploring changes to the rules governing health-reimbursement accounts, industry officials said.
The idea of coverage sold across state lines has long been championed by Republicans, who say it is the most effective way to foster competition, particularly in parts of the country where people buying coverage on their own currently have only one insurer selling plans.
A spokesman for Sen. Rand Paul (R., Ky.), said he had been pushing the idea with the administration.
“He has been working with President Donald Trump on this proposal for several months, and we believe it will directly result in giving the American people more options to find low-cost and high-quality health care options,” said Sergio Gor, the spokesman.
Democrats have characterized the effort as potentially sabotaging the consumer protections they set in the ACA, and they have won support from some insurance industry officials. The National Association of Insurance Commissioners has said it has concerns.
Some industry officials say that siphoning off healthier individuals from the existing insurance markets with the promise of skimpier benefits but lower premiums could further undermine those markets, increasing premiums ever more for the sicker, costlier enrollees that remain.
“Its aim is clearly to do with the pen what Congress wouldn’t—eliminate pre-existing condition protections, essential benefit protections and lifetime caps and turn the ACA into a sparsely available high-risk pool,” said Andy Slavitt, who was the Obama administration’s top official at the Centers for Medicare and Medicaid Services.
Mr. Trump pledged he would issue the order the day after Senate Republicans decided last month that they didn’t have enough support to pass a repeal proposal led by Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, ending GOP efforts for now to roll back the ACA.
“It’s being finished now,” Mr. Trump said last month. “It’s going to cover a lot of territory and a lot of people. Millions of people.”
Courtesy By Louise Radnofsky, Stephanie Armour and Anna Wilde Mathews @wsj.com