On Thursday, October 12, the Trump Administration announced several measures geared towards the Affordable Care Act (ACA). First, President Trump issued an
Executive Order aimed at health care insurance coverage. The Executive Order directs federal agencies to develop regulations that would make it easier for small businesses and other groups to partner and buy association health plans and to relax limits on short-term insurance plans. These actions could allow small employers and individuals to purchase health care insurance coverage that is exempt from many of the requirements of the ACA, including coverage of essential health benefits like rehabilitative and habilitative services and devices. This approach could also open doors for young and healthy individuals to leave the ACA market to find lower premiums.
Second, the Administration announced that it will immediately discontinue cost-sharing reduction payments, stating it cannot lawfully continue the payments because there is no congressional appropriations. The announcement will likely cause ACA insurance premiums to increase substantially across the board, and particularly for those that currently receive the subsidies. Even though all of these actions are within the purview of President Trump’s executive authority, it is unclear what impact the directive of the Executive Order will actually have on the ACA health care insurance market. However, ending cost-sharing reduction payments to insurers could cause them to exit the ACA market almost immediately, which would further destabilize an already fragile market. Congress has recently held bipartisan hearings within the Senate Committee on Health, Education, Labor and Pensions on strategies to stabilize the insurance marketplaces and these actions may revitalize those efforts.
Association health plans (AHP) have been a long considered option for increasing access to health insurance coverage by allowing individuals and small groups to come together to increase purchasing power to reduce health care costs. Historically, AHPs have failed to gain traction because they have not proven effective at those goals. In addition, AHPs are generally opposed by state insurance commissioners because they reduce state oversite capabilities. AHPs could also be sold across state lines and, if large enough, would be exempt from well-liked ACA consumer protections such as ensuring essential health benefits and coverage of pre-existing conditions.
Short-term insurance plans (STIP) are not subject to ACA protections per the ACA statute. These policies typically exist for people between jobs and tend to offer limited coverage with higher out-of-pocket costs to individuals.
Cost-sharing reduction payments are discounts that lower the amount individuals have to pay for deductibles, copayments, and coinsurance. They represent a foundational principle in achieving broader affordability under the ACA.
Please contact Daneen G. Sekoni, MHSA, ASHA’s director of health reform analysis and advocacy, at