President Trump’s Executive Order that is expected to be signed this week will be nothing short of a back-door attempt to undermine the benefits of Obamacare in the Administration’s ongoing attempt to repeal the landmark legislation. By expanding access to association health care plans and short-term plans, the Obamacare exchange faces an exodus of consumers which will create an existential threat for Obamacare and the access to care that the most vulnerable Americans rely on. Both of those plans are exempt from most of the critical Obamacare requirements, such as protection for those with pre-existing conditions, essential benefits, and others.
Association Health Plans
Part of President Trump’s Executive Order is to expand access to association health plans. Essentially, these plans are a way for small businesses to collaborate and buy insurance, giving them access to cheaper premiums and overall saving them money. Traditionally, farmers have benefited from these plans, although many other industries do as well.
The problem with association health plans is that they do not necessarily have to follow the essential benefits rule of Obamacare—meaning they can offer skimpier plans, for less money, that cover less than a traditional healthcare plan.
Further, as Vox[1] has pointed out, you do not need to be a farmer to join a farmer’s association health plan. With Farm Bureau, the Tennessee association health plan, you don’t have to be a farmer to enroll. This means that younger, healthier Americans who don’t want the comprehensive coverage that comes through Obamacare plans have a cheaper alternative.
Short-Term Healthcare Plans
President Trump’s Executive Order will also expand access to short-term healthcare plans, which have remained an alternative to Obamacare. Short-term plans offer very little coverage at very little cost—something that again appeals to young and healthy Americans.
Under Obamacare, President Obama limited short-term plan coverage to just 90 days. This Executive Order is slated to increase that up to one full year.
How Does This Hurt the Obamacare Exchange?
With these cheaper, less comprehensive options, many Americans – especially those younger and healthier – will opt for either association health plans or short-term plans. The ACA exchanges depend on the enrollment of young and healthy people in order to cover sicker and more vulnerable people. When these Americans leave, the exchange pool will get sicker, meaning insurers will either increase premiums, exit the exchange, or both.
[1] https://www.vox.com/policy-and-politics/2017/10/9/16449558/lowdown-tennessee-insurance-markets