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Affordable Care Act

Trump’s health insurance order pushes association plans to drive down costs — for some


Gregory Korte –


President Trump signed an executive order Thursday that he says will lower health insurance premiums by allowing more consumers to buy health insurance across state lines.

The order also proposes expanding the use of health reimbursement arrangements, or HSAs, to expand the availability of short-term health plans, and a study of barriers to competition in the health insurance market.

“This is something that millions and millions of Americans will be signing up for. They’ll be very happy, and they’ll get great health care,” Trump said as he signed the order in a White House ceremony with members of Congress, administration officials and small business owners. 

None of the changes would take effect immediately, and would need new regulations from the Labor, Health and Treasury departments to take effect. Those regulations will need to take into account public comments on the proposals.

The executive action follows a string of legislative defeats in Trump’s crusade to have Congress repeal the Affordable Care Act, which set up a series of state health insurance exchanges known as Obamacare. 

With premiums for those plans skyrocketing, Trump is turning to an exception in the Affordable Care Act that allows consumers to opt out by purchasing health insurance through associations. 

Those association health plans already exist, but federal rules limit them to employees of small businesses with a “commonality of interest.” Trump will ask federal agencies to rewrite the rules to allow them to be larger and sell plans across state lines. And because those plans won’t have the same minimum coverage requirements as Obamacare, the premiums may be cheaper.

That’s why Obamacare supporters are concerned that the association plans will turn into the kind of bare-bones catastrophic policies the Affordable Care Act outlawed. If young, healthy consumers helping to subsidize older, sicker patients pull out of state exchanges, that will result in even higher premiums for the Obamacare plans.


“You’ll have one part of the market that’s offering garbage insurance at cut-rate prices and another part of the market that’s very vulnerable to a death spiral,” said Eliot Fishman, senior director of health policy at Families USA, which supports the law.

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