President Trump went Thursday to scale back rules on health insurance across the country in the administration’s most ambitious effort to date to use its regulatory powers to undermine the Affordable Care Act.

The controversial new executive order Trump issued aims to open the way for a greater number of relatively cheap health plans that could offer skimpier coverage than allowed under the healthcare law, often called Obamacare.

The go will “provide millions of Americans with Obamacare relief,” Trump said as he formally released the order at the White House. The changes will “increase competition, increase choice and increase access to lower-priced, high-quality healthcare options.”

“People will have fantastic, fantastic healthcare,” Trump added, speaking to an audience made up of Cabinet officials, Vice President Mike Pence, Sen. Rand Paul (R-Ky.), and owners of several small businesses who the White House said would benefit by the new plans.

But while loosening consumer protections in the ACA might make insurance cheaper for those in excellent health, that would happen at the expense of millions of sicker Americans, who’ll have to pay more, warn patient advocates, state regulators and others across the healthcare sector.

“Today’s executive order jeopardizes the ability of millions of cancer patients, survivors and those at risk for the disease from being able to access or afford meaningful health insurance,” said Chris Hansen, president of the American Cancer Society’s advocacy arm.

The president’s moves, which come after congressional Republicans repeatedly failed to roll back the 2010 healthcare law this year, also renewed fears that Trump is determined to deliberately destabilize insurance markets and weaken Obama’s signature domestic policy achievement.

The administration has already taken steps to undermine those markets, including sharply cutting federal support for efforts to enroll people in marketplace coverage next year.

The ACA imposed new requirements on insurers, prohibiting them from turning away sick consumers or placing annual and lifetime limits on medical coverage, something that was once commonplace, and mandating a basic set of benefits. Those include coverage of prescription drugs, maternity care and mental health treatment.

Republicans have long complained that these requirements drive up costs.

Trump’s order leaves many vital parts of the new plans unsettled. That’s because the president cannot scrap the existing insurance protections altogether. They are in law and can therefore only be changed by an act of Congress.

Instead, Trump’s executive order directs federal agencies to develop new rules that would allow insurers to bypass some of these requirements through alternative kinds of insurance plans.

How effective the new plans will be at lowering costs for some — and how much of a threat they pose to the marketplaces — will depend on how aggressively the agencies act in writing those new rules. They face constraints from existing federal laws, and their new rules could draw challenges in court, just as Republicans challenged Obama-era rules that they argued overstepped the president’s authority.

Trump’s new proposals include expanded use of small-term plans, which don’t have to meet the insurance protections in the ACA.

The Obama administration issued rules that prohibited consumers from buying these plans for more than three months.

But the Trump administration is proposing to allow people to remain on these plans longer and renew them.

Trump’s order also instructs federal agencies to make it simpler for individual Americans or small businesses to join together to get health insurance through so-called association health plans.

It directs the Treasury Department to look at ways to expand the use of tax-free accounts called Health Reimbursement Arrangements that allow employers to provide their workers with additional money for healthcare expenses.

And the order calls on federal agencies to look at how consolidation among hospitals, doctors and other providers may be driving up costs in some markets around the country.

Backers of association health plans argue they give small employers and individuals the ability to get cheaper coverage.

And on Thursday, the head of the National Restaurant Assn. praised Trump’s order.

“By allowing small businesses and individuals to join together to access health insurance through their association memberships, President Trump’s executive order provides more opportunity for Americans to buy affordable healthcare coverage,” Dawn Sweeney said.

Administration officials said that new associations would be subject to some of the ACA’s health insurance requirements.

But association health plans historically have also been a way to circumvent state insurance regulations. And they could avoid mandates in the current law requiring plans to cover a basic set of benefits.

If association health plans or small-term plans do not have to offer as many benefits as plans governed by the 2010 health law, they may cost less. And a less comprehensive health plot might be attractive to healthier consumers, who might conclude they don’t need coverage for prescription drugs or mental health treatment because they don’t use those services.

But a flood of health plans that offer more limited benefits could also leave many more Americans with inadequate coverage — one of the problems that existed before the Affordable Care Act, which the healthcare law aimed to fix.

“People were unfortunately very susceptible to junk insurance” in the past, said Karen Pollitz, an insurance market expert at the nonprofit Kaiser Family Foundation. Consumers often did not know the limits of the coverage they bought, leaving them without protections if they unexpectedly got sick, patient advocates found.

Allowing less comprehensive health plans back into the market also tends to make health coverage more expensive for sick people.

The ACA aims to make large risk pools for people who don’t get insurance on the job or coverage under a government plot, such as Medicare. Healthy people in the pool offset the costs of sicker people, making insurance feasible for those with preexisting health problems.

Making a two-tier system in which some consumers can buy skimpier plans could reduce costs for the healthy, but over time, can destabilize an insurance market as insurers are forced to charge more and more for the sickest patients, according to experts such as the American Academy of Actuaries.

“A key to sustainability of health insurance markets is that health plans competing to enroll the same participants must operate under the same rules,” the actuaries said in a brief earlier this year on association health plans.

The group warned that insurance markets in many states could be “challenged” and “ultimately, higher-cost individuals and small groups would find it more hard to obtain coverage.”

That is why proposals in the past to expand the use of association health plans have been viewed suspiciously by state regulators, patient advocates, even some insurers.

On Thursday, Ted Nickel, the president of the bipartisan National Assn. of Insurance Commissioners and the current Wisconsin insurance commissioner, warned that commissioners have “long expressed concerns with expanding association health plans in a manner that reduces consumer protections or solvency requirements that promote safe and sound markets. We also have concerns about the impact of such a proposal on already fragile markets.”

Twitter: @noamlevey


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10:20 a.m.: This article was updated with reaction to President Trump’s order and additional details.

8:45 a.m.: This article was updated with President Trump’s remarks while formally releasing the executive order.

This article was originally published at 7:15 a.m.

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