Trump Hopes To Boost Lower-Premium Health Insurance Plans

Frustrated by failures in Congress, President Donald Trump will try to put his own stamp on health care with an executive order Thursday that aims to make lower-premium plans more widely available.

But the president's move is likely to encounter opposition from medical associations, consumer groups and perhaps even some insurers — the same coalition that so far has blocked congressional Republicans from repealing and replacing former President Barack Obama's Affordable Care Act. Critics say the White House approach would raise costs for the sick, while the lower-premium coverage provided to healthy people would come with significant gaps.

Administration officials say one of the main ideas is to ease the way for groups and associations to sponsor coverage that can be marketed across the land, reflecting Trump's longstanding belief that interstate competition will lead to lower premiums for consumers who buy their own health insurance policies, as well as for small businesses.

Those "association health plans" could be shielded from state and federal requirements such as mandates for coverage of certain standard benefits, equal pricing regardless of a customer's health status, and no dollar limits on how much the insurer would pay out.

Other elements of the White House proposal may include:

Easing current restrictions on short-term policies that last less than a year, an option for people making a life transition, from recent college graduates to early retirees.

Allowing employers to set aside pre-tax dollars so workers can use the money to buy an individual health policy.

Democrats are bracing for another effort by Trump to dismantle "Obamacare," this time relying on the rule-making powers of the executive branch. Staffers at the departments of Health and Human Services, Labor and Treasury have been working on the options since shortly after the president took office.

But as Trump himself once said, health care is complicated and working his will won't be as easy as signing a presidential order. Some parts of the plan will have to go through the agency rule-making process, which involves notice and comment, and can take months. State attorneys general and state insurance regulators may try to block the White House in court, seeing the plan as a challenge to their traditional authority.

Experts say Trump's plan probably wouldn't have much impact on premiums for 2018, which are expected to be sharply higher in many states for people buying their own policies.

Sponsors would have to be found to offer and market the new style association plans, and insurers would have to step up to design and administer them.  For insurers, this would come at a time when much of the industry seems to have embraced the consumer protections required by the Obama health law.

Depending on the scope of the order, some experts say the new plans created by the White House would draw healthy people away from "Obamacare" insurance markets, making them less viable for consumers and insurers alike. This could start happening as early as 2019. Premiums for those in the health law's markets would keep rising, and so would taxpayer costs for subsidizing coverage.

"If the order is as expansive as it sounds, association plans could create insurance products that would siphon off healthy people with lower premiums and skinnier benefits, leading more insurers to exit the ACA marketplace or raise premiums significantly," Larry Levitt of the nonpartisan Kaiser Family Foundation said recently.

"Healthy middle-class people not now eligible for subsidies could get cheaper insurance, but people with pre-existing conditions could be priced out of the market altogether," he added.

Nonetheless conservatives such as Sen. Rand Paul, R-Ky., believe the federal government has overstepped its bounds in regulating the private health insurance market. They argue that loosening federal rules would allow insurers to design plans that — although they may not cover as much — work perfectly well for many people.

About 17 million people now buy individual health insurance policies.

Nearly 9 million consumers receive tax credits under the Affordable Care Act and are protected from higher premiums.

But those who get no subsidies are exposed to the full brunt of cost increases that could reach well into the double digits in many states next year.

Many in this latter group are solid middle-class, including self-employed business people and early retirees. Cutting their premiums has been a longstanding political promise for Republicans.

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