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Trump Signs Executive Order To Undermine The Affordable Care Act

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Trump has failed on three separate occasions to fulfill his campaign pledge to repeal and replace the Affordable Care Act (ACA). So what is the president to do without the support of Congress? Well, apparently, it's to go it alone. Earlier today, he signed an executive order (EO), rolling ahead with his plans to undermine the ACA (or Obamacare).

So what does this new EO involve?


Essentially, two things: First, he's asking federal agencies to expand the use of association health plans. These are groups of small businesses who club together to purchase insurance plans. The idea is that this would give them access to cheaper premiums and exempt them from all ACA regulations. (They wouldn't have to cover certain health benefits, for example.) Trump also suggests allowing them to form outside of state lines, meaning that they can pick and choose which states' health legislation they follow. 

As Vox explains: "The bakers association could choose to follow the rules for, say, the Alabama insurance market, which mandates coverage of relatively few benefits, for all its bakeries in New York, a state with many mandates."


Second, Trump wants to broaden the definition of short-term insurance, which, by the way, doesn't have to meet ACA requirements. In the past, these programs have had a max lifespan of 12 months, but this was reduced to three months under Obama. Typically, they are less expensive than your standard insurance plans. They're also a lot thinner on benefits. Short-term insurance plans are designed for people temporarily out of work who need insurance to cover them for just a short period of time.

Trump is claiming that these changes will "expand choices and alternatives to Obamacare" and “increase competition” to ultimately cut healthcare costs. But who is really benefiting? 


Well, it's not the employee. Many critics have pointed out that these actions would allow more employers to circumvent many key ACA regulations so that, yes, employees are paying less each month but they also wouldn't have access to the same benefits that they do now. They also argue that the cheaper options would be attractive to young and healthy workers. If many were to leave Obamacare for one of these new options, costs for ACA will escalate, leaving the old and the sick with sky-high premiums.

Still, at this point, it's all just a suggestion. It will be up to the federal agencies to act on these requests. As Nicholas Bagley, University of Michigan law professor and contributor to The Incidental Economist, pointed out, "What matters is whether what the agencies eventually do is legal. And there, we only have the sketchiest sense of what's coming."



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