For all the headlines about “dismantling Obamacare,” President Trump’s executive order will likely have less of an impact than its supporters hope or critics fear. Still, it represents a modest step toward giving consumers more choices and expanding millions of Americans’ access to lower cost insurance that better fits their individual needs.
First, understand what this order is not. It neither takes anyone’s insurance away nor removes protections for people with pre‐existing conditions.
What it does is allow small businesses that band together to buy group insurance plans to be treated the same way as big companies are today. That includes the ability to buy insurance across state lines, and an exemption from some of Obamacare’s expensive mandated benefits. Plans might offer fewer benefits, but they could cost a lot less.
Individuals within a company still can’t be charged more or denied coverage because of their health, but companies with healthier work forces could receive lower overall premiums. And purchasing insurance across state lines challenges the power of the insurance cartel’s monopoly power in some states.
If individuals end up being allowed to buy insurance on these association plans, it would dramatically expand options for millions of Americans.
This wouldn’t come close to fixing all of Obamacare’s problems, but it’s still a win for consumers.
This executive order should be considered separately from the administration’s effort to stop paying price stabilization subsidies to insurance companies. In that case, the administration is essentially complying with a federal court ruling that the subsidies were illegal. Yes, if the subsidies stop it could further destabilize insurance markets, but that was starting to happen anyway.
Ideally, Congress should have rewritten the Affordable Care Act, and in using an executive order to rewrite parts of the health care law, President Trump is following a route repeatedly trod by President Obama. Only this time, the president’s actions will give consumers more freedom rather than less.