President Trump last week came out against a bill to stabilize Obamacare because he says he doesn't want to "bail out" insurers that have "made a fortune" from the healthcare law.
But in a twist, some insurers are expecting a major windfall from another part of Trump's efforts to roll back the law: His executive order calling for federal agencies to expand short-term and association health plans.
The order directs agencies to start making regulations to extend short-term plans from 90 days to 364 days. It also would loosen rules for association plans, which let businesses and groups band together to create larger purchasing power.
The biggest insurer in the country, UnitedHealth, was excited about the prospect of expanding the regulations. Dan Schumacher, the head of its insurance division, said the company already sells many association plans.
"All told, we have got about 300,000 members in association plans today," he said on an earnings call Oct. 17. "So, we have got a lot of experience, the performance is strong and I would say generally in keeping with our broader portfolio."
Schumacher also was bullish about the prospects for expanding short-term plans from 90 days to 364 days. The Obama administration had shrunk the duration last year to 90 days.
"We are excited to see that extended to the full year, because the reality is it provides a bridge for people in between coverage," Schumacher said. "It's a lot more affordable option."
Other insurers and medical underwriters also are eyeing a boon under new regulations to expand short-term plans.
Independence Holding Co., a medical underwriting group, said it expects to "significantly increase sales of not only short-term medical insurance but also hospital indemnity," which are bare-bones plans.
The underwriting group is even making investments to prepare for the increase in sales.
"In our experience, [short-term plans are] primarily purchased by people between jobs, people in counties with only a single insurer offering exchange plans, people with limited coverage networks and people who missed the open enrollment period but still want insurance," said President and COO David Kettig.
Short-term plans have been on the market for decades and are used commonly as a stopgap measure for people who need a health plan.
AgileHealthInsurance, a major purveyor of short-term plans, was also ecstatic about the order and says it reverses a short-sighted move from the Obama administration to restrict the duration of the plans.
"Numerous populations were hurt, ranging from consumers who missed Obamacare's open enrollment, to consumers who have limited or no [Affordable Care Act] exchange plan options, to consumers in the 'Medicaid gap,' to people without legal residency in the U.S.," founder and CEO Bruce Telkamp told the Washington Examiner.
Critics and Democrats complain that the executive order is an attempt by Trump to roll back Obamacare protections for sick people, including protections for those with pre-existing conditions. They say short-term plans provide much skimpier coverage than plans sold on Obamacare's exchanges on the individual market, which is used by people who don't have insurance through a job or the government.
"The insurer can even deny a new or renewed contract if the enrollee becomes sick or injured during the coverage term," according to an analysis of Trump's order from the think tank Commonwealth Fund.
It added there is no requirement that the coverage cover the law's essential health benefits such as maternity care or mental health. The think tank worries that the proliferation of short-term plans would siphon off healthy people from Obamacare's exchanges, causing a death spiral as only sicker and more expensive enrollees remain.
Insurers that have a big presence on Obamacare, such as Molina and Centene, have been reeling from the order and Trump's decision to abruptly cut off the CSR payments.
But for insurers that don't have a big presence in Obamacare, the return of longer short-term plans and association plans was welcome news.
Major insurers such as UnitedHealth have been retreating from the law's exchanges as they lose money.
For instance, Aetna sold plans in only 242 counties this year, down from 778 in 2016. It says it lost more than $430 million on the exchanges since 2014.
UnitedHealth also had a robust exchange presence in the first few years of Obamacare but dramatically scaled back because of big losses.