Buying health insurance across state lines by allowing employers to create interstate associations?
It may not be perfect or the complete answer, but President Donald Trump today signed an executive order that is a cannon ball across the bow of Obamacare — and the Democrats and three Republicans who blocked health care reforms.
The New York Times was not happy:
But for Alaska’s small businesses, the implications are free-market huge: Alaska companies will be able to form associations to buy insurance for their workers across state lines.
“This is a welcomed move by the President as he tries to ease the burdens of Obamacare by unraveling some of its costly regulations, increasing competition, and most importantly, without using billions of taxpayer dollars to prop up this collapsing law,” said Jeremy Price, director of Americans for Prosperity Alaska. “In Alaska, with the help of some legislators, Gov. Walker propped up Obamacare instead of letting it fail, and he expanded Medicaid with no limits on enrollment and no work requirements. Quite the contrast.”
The president’s order directs the departments of Health and Human Services, Labor, and Treasury to allow businesses to band together to create “association health plans.”
It also allows individuals to buy short-term health insurance in the Obamacare insurance exchanges — another positive change for Alaskans who must buy their health insurance from the one provider in Alaska’s Obamacare monopoly: Premera Blue Cross Blue Shield.
Earlier this year, Premera BCBS filed insurance rates for 2018 with a 21.6 percent decrease for customers on individual Affordable Care Act plans. This was after the rates had more than doubled since Obamacare went into effect.
“Seven years ago, congressional Democrats broke the American healthcare system by forcing the Obamacare nightmare onto the American people,” Trump said today. “And it has been a nightmare. You look at what’s happening with the premiums and the increases of 100 percent and 120 percent, and even in one case, Alaska, over 200 percent.
“And now, every congressional Democrat has blocked the effort to save Americans from Obamacare, along with a very small, frankly, handful of Republicans — three. And we’re going to take care of that also because I believe we have the votes to do block grants at a little bit later time, and we’ll be able to do that.
“Premiums have gone skyrocketing,” Trump said. “But today, one-third of all the counties in America have only a single insurer selling coverage on an exchange, and next year it looks like nearly half of all counties in our country — think of that — all of the counties, one half will have only one insurer. And many will have none. Many will have absolutely created roadblocks for people to have any form of the insurance we’re talking about.”
Americans have been bailing out of high-cost Obamacare exchanges, with people choosing to pay the IRS tax penalty instead. In 2017, 500,000 fewer Americans enrolled in Obamacare than the year prior.
In Alaska, enrollment has consistently underperformed expectation, with only 14,177 having completed their enrollment and paid for their first month’s coverage by February, 2017.
In 2016, the State reported that 23,000 Alaskans were enrolled, but those who actually paid for their insurance and completed their enrollment numbered 18,000.
On the other hand, 40,000 Alaskans are now in the Obamacare Medicaid expansion program, as the State of Alaska has been aggressively signing people up for the government health care plan.
Trump was joined during the signing of the executive order by Sen. Rand Paul, R-Ky., who has been discussing the proposal with him for months.
“President Trump is doing what I believe is the biggest free-market reform of healthcare in a generation,” said Sen. Rand Paul of Kentucky. He said people will be able to buy insurance across state lines.
Congressional Democrats and three Republicans, including Sen. Lisa Murkowski of Alaska, had blocked Obamacare reform and repeal this year. For Murkowski, she claimed her “No” vote on repeal was a matter of flawed process, but her actions left in place a systematic assault on small businesses, their employees and other private individuals.
Trump’s executive order allows a broader interpretation of the Employee Retirement Income Security Act (ERISA) to allow employers in the same line of business anywhere in the country to join together to offer healthcare coverage to their employees. A broadband telecoms company in Alaska could create an association with another such company in Texas, for example, to offer group insurance.
Employers participating in such a health insurance association can’t exclude employees from the plan and can’t create higher premiums based on health conditions.
The order also directs the Departments of the Treasury, Labor, and Health and Human Services to consider expanding coverage through low-cost, short-term insurance.
Short-term insurance is not subject to costly Obamacare mandates and rules. One study found that on average this type of insurance costs one-third the price of the cheapest Obamacare plans, while providing bigger networks and higher coverage limits. People who are between jobs are the ones who benefit, along with those in parts of the country with only a single insurer — like Alaska.
The executive order also has provisions that will allow employers to make better use of Health Reimbursement Arrangements. These HRAs are employer-funded accounts that reimburse employees for healthcare expenses, including deductibles and copayments.
Expanding HRAs may give American workers greater flexibility and control over how they manage their health care costs.
While the executive order doesn’t direct agencies to adopt specific rules, it asks them to expand access to AHPs, HRAs and short-term insurance options consistent with the law. The change must go through a public comment period before it can be rolled out.
Trump said he would take additional action later to further unwind the onerous rules associated with Obamacare. Earlier this year, the Administration shortened the enrollment window for the Obamacare exchange, from Nov. 1 to Dec. 15. Under the Obamacare Administration, people were allowed to enroll far into the new year because the technical end of the exchange was so disastrous, many were unable to enroll on time.
This month, Trump rolled back the Obamacare mandate that all insurance plans must cover contraception.