President Donald Trump, surrounded by Republican lawmakers and members of his Cabinet, signs an executive order Thursday to allow health insurance companies to sell cheaper, less beneficial plans to younger Americans. Photo by Mike Theiler/UPI | License Photo
Oct. 12 (UPI) -- President Donald Trump bypassed Congress to alter the Affordable Care Act Thursday, with an executive order to overhaul certain regulations in the 7-year-old law.
After repeated Republican efforts to repeal and replace the ACA failed this year on Capitol Hill, Trump signed an order to ease rules on small businesses joining together and buying health insurance through what are known as "association" plans.
Trump signed the order in front of Republican lawmakers, members of his Cabinet and Vice President Mike Pence in a White House ceremony late Thursday morning.
"Seven years ago, congressional Democrats broke the healthcare system by forcing the nightmare of Obamacare on the American people," Trump said. "Every congressional Democrat has blocked the effort to save Americans from Obamacare -- along with a very small number of Republicans, frankly. And we're going to fix that."
Democrats and Republicans alike have pointed out the need to stabilize the insurance marketplace, which has declined in recent years as more insurers have opted not to participate in the government-run exchanges.
Trump's order loosens limits on short-term health insurance plans, and encourages cheaper and more loosely regulated health plans aimed at younger, healthier people. If healthier people switch to less expensive plans that do not meet the ACA's minimum benefit standards -- by way of Trump's overhaul -- sicker people could wind up paying more to replace them.
Some policy experts have predicted such a scenario would send premiums soaring for remaining ACA enrollees who don't have the option of buying the cheaper plans.
"Within a year, this would kill the market," said Karen Pollitz, who worked for former President Barack Obama's Health and Human Services Department.
Trump touted the opposite Thursday, saying that allowing insurance companies to sell cheaper plans, more Americans would be able to afford insurance.
"I will sign an executive order taking the first step of providing millions of Americans with Obamacare relief," he said, adding the plans would provide "lower priced, high quality healthcare options."
"This will cost the United States government virtually nothing," Trump said.
Sources had said the Trump administration might also go so far as to reimagine the Employee Retirement Income Security Act by reinterpreting a workplace rule to broaden the types of groups that can qualify as associations, though no mention of that possibility was made Thursday.
The new association definition could cover small businesses, trade groups, unions and self-employed individuals. Under such a change, associations would not have to meet ACA benefit requirements or cover a minimum percentage of employee healthcare costs.
With associations, health care providers can effectively choose the most desirable participants, allowing the healthy to make the switch to save money -- and potentially shutting out the less healthy.
"No one healthy is now going to sign up in the ACA risk pool, because they have this cheaper option," Deep Banerjee, a health care analyst at S&P Global Ratings said.
Among those in attendance at the signing was Sen. Rand Paul, R-Ky., a key Republican holdout who voted against some of the GOP efforts this year to alter the ACA, because he said they didn't go far enough in repealing the law. For months, he pushed a presidential order like the one Trump signed Thursday, arguing that allowing small businesses to band together to buy insurance gives them leverage to lower premiums.