WASHINGTON — 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 a variety of smaller fixes that he said would increase competition, increase choice, and increase access to high quality health insurance:
► Expand the availability of association health plans, or AHPs, to allow more employers to participate.
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.
► Lengthen the term of short-term limited duration insurance, or STLDIs, for up to one year. Currently, insurance companies can only offer these Obamacare replacement plans for three months at a time.
► Modify the regulations on health reimbursement arrangements, or HRAs, to allow employers to cover more out-of-pocket health care expenses outside of Obamacare plans. "The requirements to adopt an HRA today are complicated and involved," said David Kautter, an assistant Treasury secretary. Simplifying those regulations turn HRAs into a "useful tool in expanding the range of health care options available."
All of these devices would make Obamacare alternatives more available and attractive, which is why Obamacare supporters are concerned that they'll lead to 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.
House Minority Leader Nancy Pelosi, D-Calif., said she hadn't seen the finer points of the executive order. "But I do know it's a sabotage of the Affordable Care Act."
Like many of Trump's more ambitious executive orders, the health insurance directive is fuzzy on the details and instructs his administration to change the regulations "to the extent possible" and "consistent with law."
Brian Blase, a Trump adviser on health care policy, said that process would "provide the opportunity for broad participation by the American people."
But that also means Congress may still need to pass legislation to fully implement the kind of free market approach Trump is proposing.
Sen. Rand Paul, R-Ky., has championed Trump's approach and said he was excited by the order — but recognizes its limitations.
"The agencies have to explore the issue, read the existing law, and they have to come up with an interpretation of the existing law," he said Wednesday in Kentucky. "I’d like to you to be able to join Costco and be one of 85 million people and have Costco negotiate with the insurance company."
Trump said his executive order is just the first of many — and that he still hasn't given up on pressuring Congress "to finish the repeal and the replace of Obamacare once and for all."
But after thanking the assembled supporters in the Roosevelt Room, Trump turned to leave without signing the order.
"Mr. President, you need to sign it," Vice President Pence said.
"Oh," Trump said. "I'm only signing it because it costs nothing."