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Thursday, October 12, 2017

President Trump’s Executive Order Another Act of ACA Sabotage

President Trump’s Executive Order accomplishes nothing on its own. However, it asks HHS and the Department of Labor to take the Trump Administration’s ACA sabotage campaign to new heights. With less than three weeks to go before open enrollment begins, the administration is sowing confusion among consumers.

The Executive Order would allow insurance companies to sell cheap, junk insurance, luring healthy customers out of comprehensive plans protected by ACA safeguards.

  • Junk insurance could lack minimum benefit requirements, limits on deductibles or copayments, and any obligation to pay catastrophic medical expenses. People with this junk coverage might lack maternity care, mental health care, and other basic benefits.
  • If someone with junk coverage belatedly tried to switch back to real, ACA-protected insurance, they would need to wait until the next open enrollment period.

The Order lets insurers sell junk insurance in two forms: association health plans marketed to small companies; and short-term insurance marketed to individuals.

Short term insurers could deny coverage to or raise premiums based on preexisting conditions, the results of genetic testing, age, or gender.

People with preexisting conditions or other health problems would be left behind in the ACA-protected market. Premiums would rise, causing the healthiest remaining people to leave, causing further premium increases—a classic death spiral. Many people with preexisting conditions would once again be unable to obtain coverage that meets their needs, as routinely occurred before the ACA.

The Executive Order hurts small companies that have older or sicker workers. The order lets “Association Health Plans” cherry-pick companies with younger and healthier workers, keeping costs down by skimping on covered benefits. Small companies with older or sicker workers would be left behind in their own risk pool, with higher and higher premiums as time goes by. Many firms would be forced to drop insurance entirely, leaving their employees uninsured.

The Executive Order would hurt people who buy their own insurance. Tennessee’s problems illustrate what could happen nationally under the Order. That state permits the Farm Bureau to sell insurance to its members that does not meet ACA standards. It is no coincidence that risk levels in Tennessee’s remaining individual market are the highest in the nation.  Even greater disruption would result if junk insurance became a major feature of American health care, as envisioned by Trump’s Executive Order.  Particularly among older adults and people with health problems, many of the 21.9 million Americans who now buy their own insurance would be forced to pay significantly more for significantly worse health coverage and care.