ACA Update: Trump’s Executive Order

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Advocacy Blog
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ACA Update: How Trump’s Executive Order and Cost-Sharing Reduction Payment Announcement Will Affect Access to Healthcare Last week, with a few strokes of his pen, President Trump made a number of changes to the current healthcare system. On Thursday, October 12, President Trump signed an executive order to expand association health plans (AHPs) and extend the timeframe for short-term insurance policies. Only a day later, the President announced he would no longer fund the cost sharing reduction payments. Let’s review these changes and what they mean for patients.

Association Health Plans

Association health plans are arrangements that allow small businesses to pool together and create associations in order to buy insurance. The executive order directs the Departments of Labor (DOL), Treasury, and Health and Human Services (HHS) to rewrite federal rules governing these arrangements. Under the Affordable Care Act (ACA), association health plans were required to follow the same rules as small businesses. In other words, they had to cover all of the ACA’s essential health benefits. Through this action, the Trump Administration intends to allow association health plans to be treated like large employers, meaning they will no longer have to cover the ACA’s essential health benefits and will be able to craft cheaper, less comprehensive policies.

Short-Term Insurance Policies

Also included in the executive order was a rollback of an Obama Administration rule that placed a three-month limit on short-term insurance policies. These plans typically have high cost-sharing and are not subject to many of the consumer protections of traditional policies. They are intended for people who expect to be without insurance for a limited period of time. President Trump’s executive order will increase the amount of time these plans are available, potentially up to one year. This also has the potential to adversely impact the marketplace should people continually renew these short-term plans in place of a longer-term policy.

Cost-Sharing Reduction Payments

The ACA requires insurers to offer plans with reduced patient cost-sharing to marketplace enrollees with incomes between 100 and 250 percent of the poverty level. To compensate for the added cost to insurers of the reduced cost-sharing, the federal government makes payments directly to insurance companies -- also known as cost-sharing reduction (CSR) payments. Read more:  A deeper look at cost-sharing reduction payments The issue with the CSRs arose because the ACA is not entirely clear as to whether there is legal authority – also known as an appropriation – to account for this spending. For the past several months, President Trump has been funding the CSRs on a month-to-month basis, while frequently threatening to cut off what he has deemed a “bailout” to insurance companies. Last Friday, he did just that, significantly disrupting the health insurance market and causing insurers to question whether they can remain in the exchanges.

What does this mean for patients?

While the Trump Administration argues the expansion of association health plans will lead to greater competition and decreased costs, many are concerned that it will draw young, healthy people out of the marketplace, leading to skyrocketing premiums for those with cancer or other serious illnesses. Additionally, since these plans - as well as the short-term plans - are likely to provide less comprehensive coverage, they will not cover the care that is necessary should an otherwise healthy person be diagnosed with cancer. Read More:  Executive Order Threatens Patient Access to High-Quality Cancer Care Add on top of that the end of the cost-sharing subsidies, and these actions amount to a serious blow to the health insurance market. Premiums are likely to rise for those both on and off the exchange as insurers attempt to make up for the lost funds and some may choose to exit the market entirely.

What’s next?

First, it’s important to note that despite the President’s pronouncements about what his executive order might do, it will take some time before these changes actually take effect. The reforms to the association health plans and short-term plans will happen through regulation promulgated by the various agencies mentioned above and there will be a comment period during which stakeholders can weigh in. Also, it is likely that any regulatory action in this regard will be met with legal challenges. We’ve seen this already with the cost-sharing reduction payments as dozens of states have joined a lawsuit to demand the payments be made.

What can you do?

Fight CRC will be working with our partner organizations to monitor the rulemaking process for the executive order and we will be prepared to take action. We will keep you posted through our Advocates Facebook page and email, so be sure you're registered as an advocate! As for the CSRs, that problem can be solved if Congress passes legislation to fund the payments. So if you haven’t already, participate in our Action Alert to urge your senators to fund the cost-sharing reduction payments!
And don't forget: the health insurance enrollment period has been significantly shortened this year! Visit Healthcare.gov for details on how and when to enroll. The cut-off date is 12/15/17 and the site undergoes maintenance often, particularly on weekends.