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Experts Say Trump Order Could Upend Health Care System

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With Republican efforts to repeal Obamacare stalled, President Donald Trump issued a new executive order on Thursday that could undermine the law without Congress.

“Seven years ago, congressional Democrats broke the American health care system by forcing the Obamacare nightmare onto the American people. And it has been a nightmare,” Trump said at the White House, adding that the order represented the first step “to providing millions of Americans with Obamacare relief.”

Experts say it has the potential to upend the current health care system for small businesses and individuals by opening up cheaper options for some customers, while spiking costs for others and encouraging more insurers to flee Obamacare’s exchanges.

“Healthier consumers will likely be able to enroll in plans with lower insurance rates, while more medically complex consumers may be subject to significant rate increases,” Dave Dillon, a fellow at the Society of Actuaries, said in a statement.

Trump’s order, however, lacks details and does not take effect anytime soon. Instead, it directs federal agencies to look at broad goals set out by the White House and decide over time whether new regulations might be possible. That makes judging the order’s impact difficult.

The order has two main components that target Obamacare’s regulations: One affects small business plans, and the other affects individual insurance plans. A third component could loosen rules on how businesses use health reimbursement accounts. Here’s how the insurance changes work.

Impact on small businesses

Under the proposed changes, small employers could band together to form a new type of association that can purchase insurance with fewer regulations. A group of bicycle repair shops, for instance, might form the “Bike Repairmen Association” and negotiate an insurance plan for their workers together.

Obamacare currently requires association plans to meet a minimum set of health care benefits. But the administration could potentially let them bypass those requirements, which would split the insurance market for small businesses in two.

A company with young employees and few health needs might purchase a cheap association plan that leaves out maternity care or prescription drug coverage, for instance. But a company that still needs comprehensive coverage for their older workforce could find premiums shoot up, since the plan now has fewer healthy people to bring down costs.

“They would tend to cherry pick the healthy younger workforce, which in turn destabilizes the rest of the market,” said Edwin Park, a senior fellow at the left-leaning Center on Budget and Policy Priorities.


President Donald Trump speaks before signing an executive order on health care in the Roosevelt Room of the White House, Thursday, Oct. 12, 2017, in Washington.