What Trump's new executive order means for the ACA and Covered CA


President Donald Trump has signed an executive order that allows for the creation of "Health Associations" that allow people to come together to buy lower-priced and competitive insurance plans across state lines.

Stymied in Congress by the failure of Senate Republicans to repeal and replace the Affordable Care Act, Mr Trump's executive order appears to be his administration's latest effort to undermine the 2010 law without action by legislators.

Under the new rules, association health plans will also be exempt from certain ACA rules, such as requirements that they cover standard benefits like prescription drug coverage.

Trump's order Thursday allows small businesses to band together to form "health associations" and buy their own group insurance plans outside of Obamacare markets.

While the order does not fully repeal Obamacare, as Trump has repeatedly vowed to do, it could go a long way to reshaping it.

"Having failed to repeal the #ACA in Congress, @POTUS is using a wrecking ball to singlehandedly rip apart & sabotage our healthcare system", Senate Minority Leader Chuck Schumer, D-New York, tweeted.

The switch could also allow association plans to deny coverage to the group or set rates based on the medical history of those in the group, so plans with younger, healthier members could offer lower premiums.

Barbara Boland
About the author Barbara Boland

The president said the order's provisions will provide what he calls "Obamacare relief" for millions of Americans. Those plans are now limited to three months.

While he cannot wipe away the health reform law with the stroke of a pen, Trump - who often blasted former President Barack Obama for using executive orders - can use those orders to direct agencies to amend guidance and regulations to broaden how the law is implemented. He said he would "pressure Congress very strongly to finish the repeal and the replace of Obamacare once and for all". Rand Paul, R-Ky., believe the federal government has overstepped its bounds in regulating the private health insurance market. "That's clearly not the case", Antos said. Congressional Republicans refusal to work with Democrats in good faith to find bipartisan solutions to improve the Affordable Care Act, and their hyper-partisan attempts to strip care for 30 million Americans makes them complicit.

"This executive order is the start of a long process as the gears of the federal bureaucracy churn, not the final word", said Larry Levitt of the nonpartisan Kaiser Family Foundation. "We're heading in a different direction".

Republican Senator Rand Paul, who appeared at the White House ceremony with Trump after working with the president for months on the order, opposed the Senate's most recent attempt to overhaul Obamacare because he said it left too numerous law's regulations and spending programs in place.

The Obama administration had been concerned that businesses could use association health plans to flout ACA policies and coverage mandates. Shares of hospitals and insurers focused on the Medicaid health insurance program for low-income Americans have been particularly volatile this year due to efforts to roll back Obamacare.

The order also directs multiple agencies to review the level of competition among health-care providers and insurers nationally, with an eye toward identifying actions that could increase competition.

Trump has found other ways to remove healthy people from Obamacare risk pools. The administration also halved the open enrollment period, which begins November 1, and slashed the Obamacare advertising and outreach budget.