Frustrated by Congress, Trump signs order to weaken Obamacare

WASHINGTON (Reuters) – President Donald Trump on Thursday signed an order to make it easier for Americans to buy bare-bones health insurance plans, using his presidential powers to undermine Obamacare after fellow Republicans in Congress failed to repeal the 2010 law.

Trump issued the executive order aimed at letting small businesses band together across state lines to buy cheaper, less regulated health plans for their employees with fewer benefits. Such new insurance options, however, may not be available until 2019, and the order could face legal challenges from Democratic state attorneys general.

It was Trump’s most concrete step to undo Obamacare since he took office in January promising to dismantle Democratic former President Barack Obama’s signature domestic policy achievement.

Senate Democratic leader Chuck Schumer accused Trump of “using a wrecking ball to single-handedly rip apart our healthcare system.”

“Having failed to repeal the law in Congress, the president is sabotaging the system,” Schumer said.

The House of Representatives in May passed Republican legislation to gut Obamacare. But attempts by Senate Republicans to repeal and replace Obamacare failed in July and September, in part because the proposed legislation would have caused millions of Americans to lose healthcare coverage.

Republicans call Obamacare, which extended health insurance to 20 million people, a government intrusion into Americans’ healthcare, and have been promising for seven years to scrap it.

Trump’s order weakens Obamacare in part by giving 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, known formally as the Affordable Care Act, requires most small business and individual health plans to cover those benefits.

‘DESTROYING EVERYTHING’

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

Trump’s order was aimed at making it easier for small businesses to join together as associations across state lines to buy cheaper, less regulated health plans.

When buying as a large group, these associations can decrease their risk of having a large proportion of members with expensive illnesses, which can drive up costs for small employers. The White House also said that it gives employers more leverage to negotiate with insurance companies in purchasing health insurance plans for employees.

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

The order also sought 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 Thursday’s move was “only the beginning” and that his administration would take additional steps. He said he would “pressure Congress very strongly to finish the repeal and the replace of Obamacare once and for all.”

Joseph Antos, a healthcare expert at the conservative American Enterprise Institute think tank, said he did not believe the order would have much of an impact.

Health plans would be unlikely to be able to substantially cut costs because employers from regions with lower healthcare costs, like Iowa, would not want to join up with those from regions with higher healthcare costs, Antos said.

“The claim before we saw any of this was that it was going to make affordable coverage available to tens of millions of people. That’s clearly not the case,” Antos said.

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

Democratic state attorneys general have said they will sue if Trump tries to destroy Obamacare. California Attorney General Xavier Becerra said Trump’s executive order is just another step toward imploding the Affordable Care Act.

“It should come as no surprise that California is prepared to fight in court to protect affordable healthcare for its people,” Becerra 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.

The American Hospital Association said Trump’s order “could destabilize the individual and small group markets, leaving millions of Americans who need comprehensive coverage to manage chronic and other pre-existing conditions, as well as protection against unforeseen illness and injury, without affordable options.”

Small health insurers and state insurance regulators also criticized Trump’s move.

Hospital stocks edged lower in Thursday trading, with HCA Healthcare down 1.7 percent and Tenet Healthcare down 2.6 percent. Medicaid insurers also fell with Centene off 2.5 percent.

Trump has taken a number of other steps 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, slashed the Obamacare advertising and outreach budget, and allowed broad religious and moral exemptions to the law’s mandate that employers provide coverage for women’s birth control.

Reporting by Yasmeen Abutaleb; Additional reporting by Caroline Humer, Michael Erman and Lewis Krauskopf in New York, Jeff Mason in Washington and Dan Levine in San Francisco; Writing by Alistair Bell; Editing by Will Dunham