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Trump Signs Order Circumventing Obamacare Rules

Oct 12, 2017 | ,

WASHINGTON (Reuters) -President Donald Trump signed an executive order on Thursday to weaken the Obamacare law and make it easier for Americans to buy bare-bones health insurance plans, but the action faces possible legal challenges.

Stymied in Congress by the failure of Senate Republicans to pass legislation to dismantle Democratic former President Barack Obama’s signature domestic policy achievement, Trump’s order marks his administration’s latest effort to undermine the law without action by lawmakers.

Trump’s order was his most concrete step to undo Obamacare since he took office in January after promising voters he would dismantle the 2010 law.

“The cost of the Obamacare has been so outrageous, it is absolutely destroying everything in its wake,” he said at a signing ceremony in the White House.

Trump’s order gives people more access to plans that do not cover essential health benefits such as maternity and newborn care, prescription drugs, and mental health and addiction treatment. Obamacare requires most small business and individual health plans to cover those benefits.

Trump wants to make it easier for small businesses to band together as associations across state lines to buy cheaper, less regulated health plans with fewer benefits.

The order also seeks to change an Obama-era limit on the time span people can use short-term health insurance plans, which are cheaper but cover few medical benefits. Those plans are currently limited to three months.

Trump said the order was “only the beginning” and that his administration would take additional actions. He said he would “pressure Congress very strongly to finish the repeal and the replace of Obamacare once and for all.”

Republicans, despite controlling the White House and both chambers of Congress, have failed since Trump took office to make good on their seven-year promise to repeal Obamacare, which they have called a government intrusion into Americans’ healthcare.


Experts questioned whether Trump has the legal authority to expand association health plans.

The action could open Trump to legal challenges from Democratic state attorneys general, who have said they will sue Trump if he tries to destroy Obamacare, a law that brought health insurance coverage to 20 million Americans.

Experts said the association health plans could attract young, healthy people and leave a sicker, more expensive patient pool in the individual insurance markets created under Obamacare, driving up premiums.

Conservative groups and lawmakers have cheered Trump’s order. Republican Senator Rand Paul, who said he worked with Trump for months on the order, opposed the Senate’s most recent attempt to overhaul Obamacare because he said it left too many of Obamcare’s regulations and spending programs in place.

Shares of hospitals and insurers focused on the Medicaid health insurance program for low-income Americans have been particularly volatile this year due to efforts to roll back Obamacare.

Hospital stocks edged lower on Thursday morning, with HCA Healthcare down 0.7 percent and Tenet Healthcare down 3.2 percent. Medicaid insurers also fell, with Centene off 1.8 percent.

Trump has taken a number of other steps since January to weaken or undermine Obamacare. He has not committed to making billions of dollars of payments to insurers guaranteed under Obamacare, prompting many to exit the individual market or hike premiums for 2018.

The administration also halved the open enrollment period, which begins Nov. 1, and slashed the Obamacare advertising and outreach budget.

Reporting by Yasmeen Abutaleb; Writing by Alistair Bell; Editing by Will Dunham

Our Standards:The Thomson Reuters Trust Principles.

Trump healthcare order could face strong legal objections

WASHINGTON (Reuters) – U.S. President Donald Trump’s expected plan to let Americans buy insurance across state lines could violate federal law governing employee benefit plans and will almost certainly be challenged in court, several legal experts said.

Trump said on Tuesday he would likely sign an executive order this week allowing people to cross state lines to obtain “great, competitive healthcare” that would cost the United States “nothing.”

The Republican president offered no specifics, but several sources familiar with the order said it was expected to be in the form of guidance to the U.S. Health and Human Services, Labor and Treasury Departments, which would be asked to look at ways that individuals and small businesses can band together to form “associations” that would buy large group health plans from states with the fewest regulations.

If the plan were to come to fruition, some healthcare analysts said it would undermine former President Barack Obama’s signature Affordable Care Act, popularly known as Obamacare, by making it easier for Americans to buy stripped-down health insurance policies on the cheap. Supporters say more people could gain health insurance at a lower cost.

Despite controlling the White House and Congress, Republicans have failed in efforts this year to fulfill their campaign promise to repeal and replace Obamacare, which they say is intrusive and ineffective. Democrats defend the law, saying it has extended health insurance to some 20 million Americans.

Several experts in healthcare and employment law said Trump’s plan could violate the U.S. Employee Retirement Income Security Act (ERISA), a federal law that governs large group plans that must be provided or maintained by employers or employee organizations.

Expanding association plans to market insurance to individuals who are not employees would “not be remotely legal,” said Nicholas Bagley, a professor of healthcare law at the University of Michigan.

ERISA does allow associations to act as employers and manage benefit plans.

But federal regulators have generally interpreted the law to mean that employers in the association must have a common interest beyond buying insurance, said Allison Hoffman, a professor at the University of Pennsylvania School of Law.

“The E in ERISA is employee,” Joseph Antos, a healthcare expert at the American Enterprise Institute, a think tank that has been critical of Obamacare.

“They are going to have to stretch the definition of whether you’re an employee or not,” he said of Trump’s expected plan.

The White House declined to comment.

s3.reutersmedia-18-300x206 Trump signs order circumventing Obamacare rules Politics Top Stories [your]NEWS

Senator Rand Paul (R-KY) gives U.S. President Donald Trump a thumbs up after Trump signed an Executive Order to make it easier for Americans to buy bare-bone health insurance plans and circumvent Obamacare rules at the White House in Washington, U.S., October 12, 2017. REUTERS/Kevin Lamarque


It is not clear when challenges to a Trump order would be filed. The timing could depend on if and when the Cabinet departments begin taking steps to put the plan in place.

State attorneys general would likely be among the first to legally challenge Trump’s order or regulations that stem from it, said Dania Palanker, an assistant research professor at Georgetown University’s Center on Health Insurance Reforms.

Massachusetts Attorney General Maura Healey said in a statement on Wednesday that her office “will oppose any attempt to undermine” the state’s commitment to ensuring that every resident has access to quality healthcare.

Healey is one of several Democrats who previously sued to block Trump policies, including his proposal to block travel to the United States from six Muslim-majority countries.

In addition to challenging Trump’s healthcare proposal on ERISA grounds, the states could also oppose it on federalist grounds, said Hoffman. She noted that states had primary power to regulate insurance, except where a federal law explicitly says otherwise, as Obamacare does.

Reporting by Brendan Pierson in New York and Nate Raymond in Boston; Additional reporting by Mike Erman and Yasmeen Abutaleb; Writing by Anthony Lin; Editing by Noeleen Walder and Peter Cooney

Our Standards:The Thomson Reuters Trust Principles.

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