Trump’s salvo on Obamacare unlikely to result in quick changes
President Donald Trump may be eager to dismantle the Affordable Care Act after months of failed GOP repeal efforts, but his promise to provide millions of Americans “with Obamacare relief” with the executive order he signed Thursday is sure to collide with the slow grind of the federal bureaucracy.
Trump’s order directs a trio of federal agencies to rewrite regulations to encourage the rise of a raft of cheap, loosely regulated health insurance plans that don’t have to comply with certain Obamacare consumer protections and benefit rules. They’re expected to attract younger and healthier people — leaving older and sicker ones in the Obamacare markets facing higher and higher costs.
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“I just keep hearing repeal, replace, repeal, replace,” the president said as he announced what he vowed would be the first of a series of initiatives to put his own free-market stamp on the health care system. “Well, we’re starting that process.”
But despite the high-flown rhetoric, nothing will change immediately. “This is only an executive order,” said Tim Jost, professor emeritus at the Washington and Lee University School of Law. “It is not a change in the law or even in regulations. It is a direction to draft rules.”
As a result, there’s likely to be little effect on the Obamacare markets set to open their fifth enrollment period in several weeks — and that Trump has repeatedly trashed for sticking Americans with skyrocketing premiums and dwindling competitions.
“There’s not an immediate change,” said Anne Phelps, U.S. health care regulatory leader at Deloitte. “This is going to need to go through the regulatory process. There’s some time here.”
That process is likely to be accelerated compared with the typical government trudge toward publishing new regulations. The Labor Department is already far along on rewriting ERISA to expand association health plans, said several sources familiar with the process.
A senior administration official declined to provide a timeline for the rulemaking on Thursday, but said the goal is to “get these done as quickly as possible.”
Even so, the official stressed that the agencies would publish the proposed rules and invite public comment before finalizing them — effectively eliminating any chance that they’re completed before the end of the year.
“This thing doesn’t do anything on its own,” said John Gorman, a consultant who works with several insurance companies. “What it is is the most wrongheaded, stupid list of policies that I’ve seen in recent memory.”
Under even the best-case scenario for the administration, the changes would be unlikely to affect the 2018 Obamacare markets, which take effect on Jan. 1, although some changes may take effect mid-year.
The focus of the directive is association health plans, which allow small-business owners, trade groups and others to band together to purchase health insurance. Such plans would be exempt from certain Obamacare rules, including requirements that they cover standard benefits, such as prescription drugs.
The administration is also preparing to expand the sale of stopgap policies, which don’t cover pre-existing conditions, mental health services and many other costly benefits. Coverage could extend for as long as a year, up from a current three-month limit.
If successful, the new rules could upend the way businesses and individuals buy coverage — lowering premiums for the healthiest Americans at the expense of key consumer protections. And depending on how far the administration goes, it could risk tipping the Obamacare markets into a tailspin, as healthier individuals flee the for cheaper, deregulated plans, driving up costs for the sicker individuals left behind.
Before anything can happen, though, lawyers must grapple with knotty regulatory questions that could ripple through the health system. The order gives the administration broad leeway to reinterpret what types of groups, for instance, can band together as an association to purchase cheaper coverage that’s exempt from some of Obamacare’s regulatory standards.
That definition isn’t settled, and conservative boosters like Sen. Rand Paul have pushed for opening up association health plans as wide as possible, potentially even including individuals.