President Trump on Thursday morning is signing an executive order that will direct various agencies to "provide relief" to unsubsidized Obamacare customers, but the process will not be complete in time for open enrollment beginning Nov. 1.
Senior administration officials said on a call with reporters that changes may not happen in time for the end of this year or the beginning of next, and could possibly exceed six months.
The executive order will be aimed primarily at Obamacare customers who are facing higher costs in the Obamacare market, senior administration officials said. In a call with reporters previewing the order, Andrew Bremberg, director of the Domestic Policy Council, said Trump still believes Congress needs to act on Obamacare, but also that "this administration must act to provide relief." The executive order, he said, is the one action over the next few months that can "prevent harms by Obamacare's failures."
Trump's executive order has five components, said Brian Blase, special assistant to the president for Healthcare Policy with the National Economic Council. Broadly, it will direct the administration to increase healthcare choice and quality. The Department of Labor will have to expand the use of "association health plans," which would allow various small businesses, or perhaps individuals, to band together for the purpose of providing health insurance.
The order also would direct the secretaries of Labor, Treasury and Health and Human Services to issue regulations on short-term health insurance, which the Obama administration limited, and allow for changes to health reimbursement arrangements.
The agencies will have 180 days report to the president about any other changes that could be made, at the state or the federal level, to increase choices for consumers.
Middle-class Americans who do not receive health insurance through a job or through a government program are facing higher premiums under Obamacare for 2018, but the different agencies will need several months to be able to review the regulations, propose changes and allow for a public comment period before changes are made. This means changes probably won't come in time for Obamacare's open enrollment period, which begins Nov. 1 and ends Dec. 15, given that public comment periods typically last 180 days.
Blase said the arrangement would allow "broad participation by the American people."
Critics of the order say that when enacted, it will set customers up with skimpier plans that won't adequately provide for their healthcare needs. They also worry that allowing people to peel out of Obamacare's exchanges would further destabilize the exchanges, leaving sicker customers to use the Obamacare plans while healthier, younger customers leave. Such an imbalance would continue to cause insurers to lose money in the exchanges, prompting more exits in future years and continued increases in premiums.
"It's important to keep in mind that current rate-setting for 2018 coverage will not include the changes outlined in the executive order," Dave Dillon, fellow of the Society of Actuaries, said in a statement. "Overall, the proposal has potential to bring increased instability and volatility to the health insurance markets by separating the market into two smaller pools. Longer length short-term plans may further segment the market."
Paul Ray, counselor to the Secretary of Labor, said the agency has not yet adopted a position on whether the rules governing association health plans should be altered. The order, he said, only directs the agency to see whether they should be changed.
Administration officials dispute these arguments, saying that their goal was instead to provide healthcare to people that would be less costly and offer consumers greater control. The rules on short-term plans, in particular, they pointed out, had changed only in 2016, after the exchanges already saw insurers flee the market and a double-digit hike in mid-level premiums.
In determining the rules, agency officials said, there would be an assessment as to whether any of the proposals would result in cherry-picking based on health risk.