President Trump has been working on an alternative regulatory policy initiative to workaround the lack of congressional action on healthcare. Today President Trump unveils the MAGA healthcare initiative that allows HHS to permit groups of people to form “Health Associations” and seek competitive health insurance options across state lines.
One of the biggest benefits to allowing “Health Associations” is that the group policies will not be bound to the same ObamaCare insurance mandates and will likely be lower-cost insurance products. This isn’t a government mandate. It isn’t a subsidy. It isn’t a tax. Rather, it is the removal of government regulation and barriers to the best possible health care for millions of people.
EXPANDING ACCESS TO MORE AFFORDABLE OPTIONS: President Donald J. Trump is taking action to increase the healthcare choices for millions of Americans, potentially allowing some employers to join together across State lines to offer coverage.
• President Trump signed an Executive Order to reform the United States healthcare system to take the first steps to expand choices and alternatives to Obamacare plans and increase competition to bring down costs for consumers.
• The order directs the Secretary of Labor to consider expanding access to Association Health Plans (AHPs), which could potentially allow American employers to form groups across State lines.
o A broader interpretation of the Employee Retirement Income Security Act (ERISA) could potentially allow employers in the same line of business anywhere in the country to join together to offer healthcare coverage to their employees.
•It could potentially allow employers to form AHPs through existing organizations, or create new ones for the express purpose of offering group insurance.
o By potentially making it easier for employers to band together, workers could have access to a broader range of insurance options at lower rates in the large group market.
o Employers participating in an AHP cannot exclude any employee from joining the plan and cannot develop premiums based on health conditions.
• The order directs the Departments of the Treasury, Labor, and Health and Human Services to consider expanding coverage through low cost short-term limited duration insurance (STLDI).
o STLDI is not subject to costly Obamacare mandates and rules. One study found that on average STLDI costs one-third the price of the cheapest Obamacare plans.
o Despite its low cost, STLDI typically features broad provider networks and high coverage limits.
o The main groups who benefit from STLDI are people between jobs, people in counties with only a single insurer offering exchange plans, people with limited coverage networks, and people who missed the open enrollment period but still want insurance.
• The order directs the Departments of the Treasury, Labor, and Health and Human Services to consider changes to Health Reimbursement Arrangements (HRAs) so employers can make better use of them for their employees.
o HRAs are employer-funded accounts that reimburse employees for healthcare expenses, including deductibles and copayments.
o The IRS does not count funds contributed to an HRA as taxable income.
o Expanded HRAs could potentially give American workers greater flexibility and control over how to finance their healthcare needs.
OBAMACARE IS FAILING: The status quo is not delivering quality healthcare options for the American people, who are facing higher premiums and fewer options.
• The percentage of workers at small firms receiving coverage through their employer has declined from nearly half in 2010 to about one-third in 2017.
• In 2018, more than 1,500 counties (nearly 50 percent of all counties) are projected to have only one option on their individual insurance exchanges, according to the Centers for Medicare and Medicaid Services.
o This means 2.6 million Americans, or nearly 30 percent of exchange participants, will be left without a choice of insurers.
• From 2013 to 2017, average premiums for individual health insurance plans have doubled, increasing by $2,928 according to the Department of Health and Human Services.
o During this period, every State using http://www.healthcare.gov saw individual insurance premiums increase.
• Americans are departing the Obamacare exchanges and millions are choosing to pay the law’s penalty instead.
o 500,000 fewer Americans enrolled in an Obamacare plan in 2017 compared to the prior year.
o Current exchange enrollment is 60% below what the Congressional Budget Office expected when the law took effect.
o 6.7 million Americans chose to pay the Obamacare penalty in 2015 rather than purchase insurance on the exchanges. 37% of penalized households made less than $25,000, and 79% of penalized households made less than $50,000.
[VIA Rand Paul] I’ve been working with President Trump and his Cabinet for months to get this done.
How will it work? Well, nationwide associations like the National Restaurant Association will be allowed to form groups across state lines and, with the leverage of size, demand Big Insurance bring down their outrageous premiums.
Many of the 28 million people left behind by Obamacare who still don’t have insurance work low-wage jobs in our fast food restaurants. The President’s decision today will allow workers from two million restaurants to come together to form a buying group and through sheer size get cheaper and better insurance.
Millions of people will be eligible for the same group insurance that big corporations offer. In fact, Health Associations may grow to be larger than the largest of our corporations. Currently, about half of private insurance is cross-state, self-insured ERISA plans, and most employees love them. The President’s action today will allow the millions of people in the individual market an escape route to group insurance.
Association Health Plans will be among the biggest free-market reforms of health care in a generation, and it will do more to counter the impact of Obamacare than most of the repeal bills did, because it will actually go after regulations that the legislation didn’t touch due to Senate rules.
Existing law allows the President to legalize these new groups and plans. Where previous administrations have been weak, President Trump is bold to allow this reform.
All group insurance guarantees access regardless of pre-existing conditions. But what is great about cross-state Health Associations is that they will be exempt from some Obamacare and State regulations. This exemption from regulations is why cross-state group insurance has seen the lowest rise in premiums of any health insurance available.
The regulators, and hand-wringers, will worry that Health Associations will lead to the least common denominator and simply high-deductible, bare-bones policy. The opposite might occur. We do know that the large group, cross-state ERISA plans out there currently run the gamut and, in fact, often are the most desirable plans available.
Million-person Health Associations will have enormous leverage to get better prices for consumers – that’s exactly why Big Insurance opposes them.
Most of the “fake” replacements offered don’t fix the individual market; they simply keep in place Obamacare’s subsidies for the individual market. My hope is that cross-state Health Associations will allow so many people to flee the individual market that subsidies will no longer be necessary.
It will take 6 months to a year to begin seeing the benefits of Health Associations. I want to thank President Trump for taking this bold step forward.
As Health Associations form, the death spiral of Obamacare will continue. While we should and will keep fighting for repeal through Congress, I’m excited to have worked with President Trump on a free market reform that can begin to fix many of the problems Obamacare created.
Congress may have failed to act — but President Trump and I haven’t. We’ve been working on this behind the scenes.
So what does that mean for you, the healthcare consumer? Well, first of all, it means millions of people who now go it alone or in very small groups will join together and make the CONSUMER THE KING, with increased bargaining power and better prices.
You will be able to choose among better and cheaper insurance that works for you — something Obamacare made illegal. You will be able to buy across state lines, opening up competition for the best plans. Many Obamacare regulations will be waived for those in these groups, including costly mandates on what the plans must cover.
Best of all, this isn’t a government mandate. It isn’t a subsidy. It isn’t a tax. Rather, it is the removal of government regulation and barriers to the best possible health care for millions of people.
As a career physician, I know Obamacare is broken and must be repealed. I will keep fighting for this. But I also know health care was broken before Obamacare, and we should take every opportunity to fix what we can.
That’s what President Trump is doing this week, and I’m proud to have worked with him on this important health care reform. (link)