President Trump aims to strike down parts of Obamacare with new executive order

President Trump signed a new executive order on health care.

ByABC News
October 12, 2017, 11:49 AM

— -- President Donald Trump signed an executive order Thursday at the White House that seeks to increase consumer options for health insurance, but could further destabilize Obamacare marketplaces.

With the “power of the pen,” Trump's executive order seeks to unravel significant parts of insurance rules under the Affordable Care Act by directing federal agencies to consider new rules. The order, through a series of rule recommendations to be carried out by Health and Human Services, the Department of Labor and the Treasury Department, aims to get those agencies to expand association health plans, short term limited duration plans and makes recommendations for changes to health reimbursement arrangements.

The president said during the signing that he is "taking the first step to providing millions of Americans with Obamacare relief."

The American people "will have so many options," he said. "This will cost the United States government virtually nothing, and people will have great, great health care. And when I say people, I mean by the millions and millions."

Republicans like Sen. Rand Paul, R-Ky., who joined the president in the Roosevelt Room for the signing, have long been proponents of expanding association health plans, which allow small employers to band together to buy health insurance.

The Trump administration says it will direct the Department of Labor to give small employers access to insurance options at lower rates in the large employer markets.

But large employer plans are not subject to some of the requirements under the Affordable Care Act. So, while people may be able to access lower cost health insurance, consumers might not be provided some essential benefits such as maternity care.

The White House stressed on an earlier briefing call with reporters that, at this time, there would not be changes to the required minimum coverage standards, but questions remain over whether or not self-employed individuals could join association health plans.

Critics have warned that these plans could potentially move large groups of young, healthy people out of insurance markets leaving sick people in high risk pools, subject to higher premiums.

Trump also said he is asking Labor Secretary Alexander Acosta to consider ways to allow association health plans to sell plans across state lines.

Currently there are provisions under the ACA that allow plans to be sold across state lines as long as they comply with consumer protection and licensing laws.

But the challenge is that insurance companies aren’t mandated to sell across state lines -— and many simply don’t want to. The National Association of Insurance Commissioners warned that consumers have not been interested in the plans calling it a ‘red herring’ that consumers would benefit.

The order could also lengthen the amount of time short-term limited duration plans can offer coverage from three months to up to a year.

Typically people who buy these plans are people between jobs, people who missed the enrollment period but want health insurance, and young people no longer covered by their parents. The plans are typically cheap, offer fewer benefits and still require people to pay the individual mandate -- a tax penalty for not being fully covered.

Experts warn that it’s unlikely Trump’s executive order will have much of an effect in the coming year as it will take time for these different rules to be put into place. But the executive order could have a big impact on the insurance marketplace, which is already unstable.

“I think undermining the ACA marketplace is a feature, rather than a bug of this order,” Larry Levitt, senior vice president at the Kaiser Family Foundation, told ABC News.

Conservatives say the executive order is a welcome first step toward helping out individuals facing premium hikes in the individual insurance markets. Still it could receive push back from some on the right who would still like to see an Obamacare "repeal and replace" accomplished, a key campaign promise for Republicans in 2016.

“No one should think that one administrative change will resolve all of the problems that have currently affect individual and small group markets under the ACA. The ACA has severely damaged both markets and this is going to take a legislative remedy eventually,” said Bob Moffitt at the conservative Heritage Foundation.

Others see the steps as incremental.

"I don't see this as having a big impact on anything, if any," said Joe Antos, health care expert at the conservative American Enterprise Institute.

Still, the National Federation of Independent Businesses, the small business lobby, said they're "grateful" for Trump's work to address regulations.

"In the wake of the Senate’s failure to repeal Obamacare, we are grateful to President Trump for addressing regulations that make it harder and costlier for small business owners to provide healthcare for themselves and their employees," the organization's president, Juanita Duggan, said in a statement. "The cost of health care has been the number-one problem for small businesses for more than 30 years."

Critics contend this is the latest attempt to “sabotage” Obamacare and it could end up causing even more confusion for the public before enrollment in the ACA begins on November 1.

“Angry that Congress wouldn’t repeal the health care Americans depend on, President Trump is purposely trying to sabotage the law by creating garbage insurance which will undermine the market, raise premiums, reduce coverage and expose millions of Americans again to discrimination based on pre-existing conditions,” Brad Woodhouse, campaign director for Protect Our Care and former DNC communications director, said in a statement.

Andy Slavitt, former acting administrator of the Centers for Medicare and Medicaid Services under President Barack Obama, called the order "long on propaganda" and "short on details in a tweet.

Even as Trump works on executive steps on health care, key senators are still talking behind the scenes about bipartisan solutions to stabilize the health insurance marketplace.

Senate Health, Education, Labor and Pensions committee chairman Lamar Alexander and Ranking Member Patty Murray have been talking through the Senate recess this week, zeroing in on the key issue of cost-sharing reduction payments to insurance companies to help pay for low-income people.

ABC News' Ali Rogin contributed to this report.

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