Health Care

Repeal by Executive Order—Trump’s Latest Health Care Sabotage, Explained


On October 12, Trump issued an executive order designed to destabilize health care markets, and followed that up with another announcement that will lead to higher premiums and more uninsured Americans. The first order directed various agencies to expand the availability of low-quality plans that do not offer the same critical protections as other plans under the Affordable Care Act; the second fulfilled Trump’s long-running threat to cut off cost-sharing reduction (CSR) payments, which will cause the cost of coverage to spike for millions of Americans. Ask your Members of Congress to stop Trump’s sabotage of the ACA: ensure that all health plans have guaranteed protections and that CSR payments continue.

What Trump did this time

After months of watching the Republicans fail to pass a TrumpCare bill, Trump decided to take matters into his own hands by undermining health care markets through executive action.

His executive order, issued in the morning, directed the Departments of Treasury, Health and Human Services (HHS), and Labor to implement new regulations that will expand the availability of association health plans (AHPs) and short-term insurance plans. While this won’t have an immediate effect because the departments still need to write the regulations and hold a rulemaking process, this will drastically reduce the number of Americans enrolled in plans that are covered by the Affordable Care Act’s consumer protections. If small businesses and others take full advantage of the new rules, they could offer their employees plans that don’t cover essential health benefits and have more leeway to discriminate against people with pre-existing conditions.

This first order also directs HHS to extend the amount of time people can be enrolled in “short-term coverage,” which is intended as a stopgap for people in transition periods. Short-term coverage is not subject to the Affordable Care Act’s consumer protections, so unlike ACA plans they can have limits on coverage and are not required to cover the same suite of health benefits. The other would extend the time limit on short term plans from the current three months to a full year. By expanding the time limit on short-term plans from three months to a year, it is clear that Trump wants to siphon off healthy consumers from the ACA markets.

The result of these changes will be that more young, healthy consumers enroll in these skimpy plans, driving up the cost of more comprehensive ACA-compliant plans. This will result in ACA plans becoming more expensive, which will drive people with less serious health needs out of these plans, which will result in higher premiums—a cycle known as a “death spiral.” The end result will be two insurance markets: one for relatively healthy people that offers cheap but inadequate coverage, and one for sick people that offers prohibitively expensive coverage.

Finally, in the evening, the White House announced the administration would no longer make cost-sharing reduction (CSR) payments to insurers. CSRs are payments the government makes to insurers to help reduce out-of-pocket expenses like co-pays and deductibles. Trump has been threatening to cut off these payments to try to coerce Democrats to make concessions. The effects of this decision will hurt low- and middle-income Americans, and could result in insurers pulling out of health care markets—with no time left for others to fill those gaps.

What this means

Both of these decisions fit Trump’s ongoing efforts to sabotage our health care system at every turn.

The executive order that expands AHPs and short-term insurance won’t have any effect on its own, but agencies are expected to release new regulations by the end of the year. These regulations will still have to go through the regular rulemaking process, including a public comment period, so there is still time before this will result in any changes.

Cutting off the CSRs, on the other hand, will immediately result in higher premiums and fewer people covered. The Congressional Budget Office found that cutting off CSR payments would result in premiums spiking by 20%, 1 million fewer people having insurance, and a $194 billion increase in the deficit over the next decade. In other words: taxpayers will foot the bill for the privilege of kicking 1 million people off of their insurance, and driving up premiums drastically for those who remain.

What we can do

Democrats have been negotiating with Republicans on a bipartisan “stabilization bill” that would include a guarantee that CSR payments continue. But merely guaranteeing those payments is not enough. Ask your MoCs to ensure that the bipartisan bill continues protections for people enrolled in association health plans, that short-term plans stay truly short-term, and that CSR payments continue.

Sample Call Dialogue

Caller: Good morning/afternoon! Can you let me know Representative/Senator _____’s position on the bipartisan efforts to stabilize the health insurance markets?

OPTION 1: SUPPORTS

Staffer: Thank you for calling. Representative/Senator ______ supports Senator Murray and Senator Alexander’s efforts to stabilize the markets, and hopes they can reach an agreement that will keep costs down for consumers.

Caller: I’m glad to hear it, but the deal Senators Murray and Alexander were discussing isn’t enough after Trump’s latest round of sabotage. His latest executive order will cause a death spiral unless Congress acts. I want Representative/Senator _____ to commit to supporting a stabilization bill that will both guarantee the CSR payments, and close loopholes that allow association health plans and short-term plans to offer inadequate coverage.

Staffer: I will pass along your thoughts to the Representative/Senator.

Caller: Please do. This is very important to me, and I will be watching to ensure the Representative/Senator protects care for all Americans.

OPTION 2: OPPOSES/DODGES/NO POSITION

Staffer: Thank you for calling. Representative/Senator ________ believes that the markets are failing, and that the only way to protect consumers is to replace the existing law with something better.

Caller: I’m very disappointed to hear that. Nearly every expert disagrees with the Congressman/Senator that the markets are “failing,” and says that the latest executive orders from the White House will drastically drive up premiums and put coverage at risk for at least a million Americans. Representative/Senator _______ has an obligation to protect his/her constituents by supporting a bipartisan bill to guarantee CSR payments and close loopholes that allow association health plans and short-term plans to offer inadequate coverage.

Staffer: The Representative/Senator doesn’t want to bail out insurers by throwing money at failing markets. We need fundamental change, not just a band-aid we make the taxpayers pay for.

Caller: This isn’t a bailout for insurers—this money will help Americans afford their health insurance coverage. And according to the CBO, the taxpayers will have to pay more to cancel these payments than they would if Congress appropriated the money for them—so not only will failing to act hurt people who need help affording coverage, but you’ll be making me pay for it.

Staffer: I will pass along your thoughts to the Representative/Senator.

Caller: Please do. This is very important to me, and I will be watching to ensure the Representative/Senator protects care for all Americans.