President Trump's effort to loosen federal rules to expand use of cheap, lower-quality health plans is drawing complaints from several major medical groups who fear the move will hurt the implementation of Obamacare.
The American Hospital Association and a collection of 18 groups — including the American Heart Association, March of Dimes and the American Cancer Society's lobbying arm— opposed the executive order that Trump signed Thursday. Behind the criticism is a fear that the order's embrace of short-term and association health plans could destabilize Obamacare's marketplaces and endanger protections for people with pre-existing conditions like cancer.
The order directed federal agencies to explore regulations to expand the use of association health plans and lengthen the duration of short-term catastrophic health plans. The goal is to give people more options to avoid rising premiums under Obamacare's exchanges.
But the groups charge that the plans don't offer the same robust coverage mandated by Obamacare. These include mandates that eliminate lifetime caps on coverage and require coverage of essential health benefits such as maternity care.
The groups and other experts worry that healthy people will leave the law's exchanges and get a short-term or association plan, which would drive up prices for people under Obamacare.
"These actions will likely split the market between those who need the comprehensive benefits provided under current law and those who are currently healthy and can gamble with substandard coverage," the statement said.
"This order has the potential to price millions of people with pre-existing conditions and serious illnesses out of the individual market and put millions more at risk through the sale of insurance plans that won't cover all the services patients want to stay healthy or the critical care they need when they get sick," the 18 patient groups added.
They added that short-term health plans can deny coverage to people based on pre-existing conditions such as diabetes or cancer.
The American Academy of Actuaries was also skeptical of the order's goals.
"Creating exemptions from the Affordable Care Act (ACA) insurance market rules can have far-reaching and unintended effects," said Academy Senior Health Fellow Cori Uccello in a statement. "These effects could include tilting the market in favor of entities with weaker benefits or solvency standards and weakening the protections for consumers with pre-existing health conditions."
The statement is the latest in a fight that has erupted between Republicans that seek to get rid of Obamacare, and patient and doctor groups worried about the impact on people with pre-existing conditions.
Republicans have argued in numerous repeal bills this year that the law's insurer mandates are the biggest driver of high premium hikes that have been as high as 50 percent this year in some states. Patient groups are worried that any attempt to weaken those mandates will result in eroding protections for sick people.
A similar fight played out over an amendment offered by Sen. Ted Cruz, R-Texas, to a repeal and replace bill considered in the Senate this summer. Cruz's amendment would have allowed Obamacare insurers to sell plans that didn't abide by the mandates as long as they sold one that did.
Major groups like the American Cancer Society objected that Cruz's plan would have the same effect as Trump's association and short-term plan order: younger and healthier people would only go to the cheaper plans that are exempt from Obamacare rules, which would destabilize the market and boost costs for the sick.
Cruz previously noted that the amendment was a major way to help Americans avoid crushing premiums under Obamacare.
But it remains unclear the extent of the expansion of short-term and association plans. There are several major unanswered questions surrounding the executive order that likely won't be answered in time before 2018 open enrollment starts on Nov. 1.
The order only directs federal agencies to look into regulations to expand association and short-term plans. It does not explicitly allow association health plans, which are used by small businesses to band together to increase purchasing power, to market to individuals.
The administration also has not spelled out if short-term plans qualify for meeting the requirement to have health insurance under the individual mandate in order to avoid a hefty penalty.
The agencies tasked with changing the rules for the plans will have to draft new regulations and then leave time for public comment. The process could take months before final regulations are approved.
However, one expert said the executive order could have a big effect on the individual market and Obamacare's exchanges for 2018.
"This executive order could lead people to believe that there are new and cheaper insurance options coming, and that may discourage them from signing up during open enrollment," Larry Levitt, senior vice president of the nonpartisan Kaiser Family Foundation told the Washington Examiner. "With the confusion from the executive order, premium increases, and reductions in outreach and consumer assistance, one has to expect signups to drop in the upcoming open enrollment period."
Brookings Institute Fellow Matthew Fielder told the Washington Examiner that some insurers could ratchet back marketing efforts for 2018 if "they are concerned about short-term plans starting to siphon off healthier enrollees in the latter part of the 2018 plan year."
He added that the immediate impact from the order is likely to be relatively modest. But the order and impending regulations could have a larger impact in the runup to 2019.
"I would expect insurers to become concerned about how those changes will affect the individual market risk pool," he said. "That uncertainty would likely cause them to price higher and be less inclined to participate for 2019."