Trump is expected to sign an executive order on Thursday directing an overhaul of major federal regulations that would encourage the rise of a raft of cheap, loosely regulated health insurance plans that don't have to comply with certain Obamacare consumer protections and benefit rules. They'd attract younger and healthier people — leaving older and sicker ones in the Obamacare markets facing higher and higher costs.
It's not yet clear how far the administration will go, or how quickly it can implement the president's order. But if successful, the new rules could upend the way businesses and individuals buy coverage — lowering premiums for the healthiest Americans at the expense of key consumer protections and potentially tipping the Obamacare markets into a tailspin.
"Within a year, this would kill the market," said Karen Pollitz, a senior fellow at the Kaiser Family Foundation who previously worked at former President Barack Obama’s HHS Department.
The focus of the directive is association health plans, which allow small-business owners, trade groups and others to band together to purchase health insurance. Such plans would be exempt from certain Obamacare’s rules, including requirements that it cover standard benefits, such as prescription drug coverage. To make those changes, the administration is already working to reinterpret ERISA, a massive federal law that governs many workplace benefits, people familiar with the order said — opening the door to more expansive changes that could affect Obamacare plans more directly.
The administration is also preparing to roll back Obama-era restrictions on short-term health insurance plans, allowing insurers to once again sell stopgap policies which don't cover pre-existing conditions, mental health services and many other costly benefits. Coverage could extend for as long as a year, up from a current three-month limit.
