On Thursday, October 12, 2017, President Trump signed an executive order that many experts predict will significantly undercut the viability of insurance markets regulated by the Affordable Care Act. The thrust of the executive order is aimed at easing regulations on “association health plans” or plans that allow groups of employers, typically in the same industry, to band together in order to buy low cost/minimal benefits insurance for their employees. Prior to the ACA, these types of plans were known as “junk plans,” in part because they allowed employers to pick and choose which state’s regulations they would operate under–regardless of where the majority of employees were located. This tactic really benefited employers with young employees because it allowed them to skirt state regulations in order to provide bare bones insurance while sucking healthy people out of the insurance market–causing premiums for the rest of us to go up. The ACA drastically changed how association health plans operate because they are now mandated to provide the essential health benefits package at the core of health care reform (e.g., maternity care and prescription drugs).
The result of the executive order will not be immediate, as regulations must be drafted and implemented pursuant to the order. Nonetheless, the risks for destabilizing the markets is great.