President Trump’s Executive Order on Affordable Care Act

This story will be updated.

President Trump is poised to sign an executive order Thursday that would make major changes to the Affordable Care Act by expanding the use of so-called association health plans and short-term health insurance, which have fewer benefit requirements than the plans sold through the Obamacare exchanges, according to multiple news reports.

The move appears to be Trump’s reaction to the failure of Congressional Republicans to repeal and replace Obamacare earlier this year, as he noted earlier this week on Twitter:

It also delivers on an idea Trump put forward earlier this year in a speech to Congress, in which he said, “the way to make health insurance available to everyone is to lower the cost of health insurance.”

Association plans are exempt from many insurance regulations, like the requirement to cover a slate of medical conditions. The definition of who qualifies for the “association” would be left to the Labor Department, The Wall Street Journal reported. Short-term health plans, meanwhile, have the ability to charge sick people more than healthy people and to deny people with preexisting conditions.

These policies would likely be less costly than the more robust plans sold on Obamacare’s state-based insurance exchanges. But the concern, among critics, is that they would cherry-pick the healthiest customers out of the individual market, leaving those with serious health conditions stuck on the Obamacare exchanges. There, prices would rise, because the pool of people on the exchanges would be sicker. Small businesses who keep rather more robust plans—perhaps because they have employees with serious health conditions—would also likely face higher costs.

As the Kaiser Family Foundation’s Larry Levitt wrote on Twitter,
“This executive order is good for healthy people (while they’re healthy) and bad for sick people. Only question is the extent of the effect.”

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