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how will a trump administration affect health insurance

President Trump signed an executive order that modifies Obamacare in five ways. These changes won’t go into effect until later in 2018 at the earliest.

First, the order directs the Secretary of Labor to expand access to association health plans. These are policies made available to trade groups, small businesses, and other associations. Its members can purchase policies in other states.

The order fulfills a campaign promise to allow health insurance companies to operate across states lines. Each state has specific regulations. That makes it expensive for national insurance companies to operate in different states. As a result, five companies service half the insured population. Trump maintains that the increased competition would reduce these companies’ monopoly power.

That would drive insurance costs down.

But the executive order could increase these five companies’ power instead. They are the only ones that have the clout to operate across state lines. If they controlled that market, they would raise prices.

Even more frightening is that the new policies wouldn’t be regulated. The administration is likely to exempt association plans from the Affordable Care Act’s rules. They wouldn’t have to get state licenses, either.

As a result, they wouldn’t have to offer the ACA’s 10 essential benefits. They could reimpose lifetime and annual limits. They could charge more to those with pre-existing conditions. Without regulations, these plans would look like they did in the early 1990s. They left 398,000 people with $123 million in unpaid claims, according to a report by the Government Accountability Office.

If this rule took effect, it would make the insurance offered on the health insurance exchanges unaffordable. That’s because healthy people would flock to the lower-cost association plans that offer fewer benefits. The ACA-compliant plans would be stuck with the sickest people. That’s like asking auto insurance companies to insure only those who have been in car accidents. Insurance companies would have to raise rates to remain profitable or drop out of the health insurance exchanges completely.

The order may affect those with company-sponsored plans. The ACA allows employers to choose a coverage plan from any state. That didn’t matter when the ACA mandated all plans to have the same benefits. But employers might flock to the new plans have fewer benefits because they cost less.

Second, the order requests the Labor Secretary to ease restrictions on short-term health plans. Under Obamacare, these policies could last no longer than three months. Trump wants them to last up to 12 months.

Third, the order requests the Labor Secretary to allow employers to use pretax dollars for “health reimbursement arrangements.” These help workers pay for any medical expenses. Under Obamacare, they could only pay for health policies that meet its rules.

Fourth, the order commissions a study to find ways to limit consolidation within the insurance and hospital industries.

Fifth, it directs agencies to find additional means to increase competition and choice in health care.