No, not by Congress—by a Trump executive order signed today.
President Trump has signed an executive order expanding access to “association health plans”—policies that do not have to adhere to a number of Obamacare rules.
The idea, strongly supported by Sen. Rand Paul, is that individuals with a common profession or interest could band together and be counted as a “large-group” (equivalent to an employer) for health insurance purposes.
Individuals could thus opt out of the Obamacare plans they’re currently enrolled in, and presumably obtain lower rates when they buy into catastrophic or bare bones plans. The consequence of the executive order could be a parallel, consumer-driven system, although one that could be reversed by the next president.
Association plans are regulated under the Employee Retirement Income Security Act (ERISA). Because it will be under ERISA, it may turn out that this option is only open to employed workers, not to non-workers. We shall have to wait and see.
The great advantage here is that “large-group” plans are subject to fewer mandates than under Obamacare – such as having to offer Essential Health Benefits. Large-group plans also have more leeway in setting premiums, which can be based on the health of the group (which is barred under the ACA for small-group plans). Associations that gain large-group status could therefore offer less expensive coverage if they were made up mainly of younger, healthier members.
Most association health plans now in place are considered small-group plans.
The National Association of Insurance Commissioners has gone on record in opposition, arguing that it would “make insurance less available, make insurers less accountable, and prevent regulators from assisting consumers in their states.” This not surprising. State officials do not welcome competition from insurance approved in other states.
It is also unclear if the executive order will withstand legal scrutiny and challenge. Congress could also undermine the effort by refusing to fund changes to existing law made by the executive order.
This is just the start of the process. Several federal agencies have been directed to write rules implementing the executive order, so there will be future opportunities for the public to weigh in on the new regulations. We will keep you posted on these developments.
