Trump says he may sign executive order allowing interstate purchase of health insurance

With the latest GOP health care plan dead, Trump says he my issue an EO.

ByABC News
September 27, 2017, 8:55 PM

— -- President Donald Trump says he is considering signing an executive order that he says would allow people to purchase insurance across state lines.

“I am considering an executive order on associations and that will take care of a tremendous number of people with regard to health care,” said Trump during a brief gaggle with reporters at the White House today.

“I'll probably be signing a very major executive order where people can go out, cross state lines, do lots of things and buy their own health care, and that will be probably signed next week. It's being finished now. It's going to cover a lot of territory and a lot of people. Millions of people.” said Trump

Current law allows companies to sell health insurance across state lines, but so far few have offered out-of-state policies. To date, although all states have the authority to do so, only six have enacted across state lines legislation.

And even among states that passed laws to allow out-of-state sales, no insurer has entered the market. Skeptics point out the difficulties that companies face in developing a health insurance product that can be sold in multiple states. They include challenges in building a provider network with competitive rates, regulatory and administrative differences across states and the impact on risk pools that could result in higher premiums for less-healthy individuals.

Proponents of the plan insist it can be done.

Sen. Rand Paul, R-Ky, touted the idea Wednesday morning on MSNBC's Morning Joe.

"I believe President Trump can legalize, on his own, the ability of individuals to join a group or health association across state lines to buy insurance," said Paul.

While the White House has not offered further guidance on the executive order Trump mentioned, Paul said he’s discussed his proposal with the president.

His plan would expand Association Health Plans, or AHPs, which function by letting small businesses group together in order to buy health insurance. Paul’s plan would amend the 1974 federal law, the Employee Retirement Income Security Act, or ERISA, under the Department of Labor, and allow non-employer groups, for example alumni associations, to band together and purchase insurance across state lines. Currently, insurance plans are controlled at the state level.

The idea of creating a national insurance market is not new -- Republicans for years have touted interstate insurance plans. But they’ve received major push-back from groups like the National Association of Insurance Commissioners, who say that interstate sales would allow insurers to “cherry-pick” the best customers, and older, sicker people could face higher premiums as a result. Out of state providers could also face challenges with building a provider network of physicians and hospitals and the new law would need to be consistent with current provisions under the ACA, according to the America's Health Insurance Plans, which represents companies that sell health insurance.

"We want to find solutions that deliver more choices, more competition, and lower costs," said Kristine Grow, senior vice president of communications at America's Health Insurance Plans. "We will be looking forward to the details of what specifically will be proposed. While cross-state selling has been offered as a solution, these are some of the challenges that need to be addressed for it to be a viable solution."

Sabrina Corlette, a research professor at the Center for Health Insurance Reforms at Georgetown University said that the Trump administration actually has a lot of power and authority to change the rules for association health plans.

The Obama administration prohibited association health plans from buying insurance across state lines a by a guidance that was not put into a formal regulation, said Corlette. “Without a formal regulation it could be rescinded with a stroke of a pen.”

Paul said that he has been in contact with the Secretary of Labor Acosta and President Trump about his plans, and the response has been positive.

"They're enthusiastic about it, but I think Graham-Cassidy frankly distracted us. The good thing about my proposal, it costs zero dollars,” said Paul.

“I don't think people on the left are going to hate it. It basically is legalizing the ability of consumers to collectively come together to bargain for cheaper prices. We need to do this because the insurance companies have all the power -- if you watched any of the debate recently over this, both left and right think insurance companies have too much power. How do we get power to the consumer? Let the consumer organize."

MaryAlice Parks and Serena Marshall contributed to this report.