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Administration Pursues Insurance Market Policy Changes through Executive Order

October 12, 2017

An executive order issued today by President Donald Trump seeks to promote health insurance options that do not have to adhere to all of the requirements and protections under the Affordable Care Act (ACA). The executive order also directs federal agencies to focus on “promoting competition in healthcare markets and limiting excessive consolidation throughout the healthcare system.”

Under the executive order—Promoting Healthcare Choice and Competition Across the United States, the Secretaries of the Departments of Treasury, Labor, and Health & Human Services (HHS) are directed to review existing policy governing Association Health Plans (AHP), Short-Term Limited-Duration Insurance (STLDI), and Health Reimbursements Arrangements (HRA), and put forth proposed regulations or revised guidance that will expand the availability and use of those insurance mechanisms.

These types of coverage products, AHPs, STLDIs and HRAs, could be offered without abiding by certain ACA benefit standards, such as the requirement for coverage of essential health benefits and patient protections.

The Administration asserts that this will increase competition and bring down costs for consumers by providing access to alternative insurance options to the comprehensive coverage offered under ACA requirements. Many coverage advocates have raised concerns that healthier consumers will take advantage of less-costly, less-generous coverage, leaving the sicker and higher cost patients to secure coverage through ACA plans; ultimately, undermining the ACA insurance marketplaces.

The most successful and effective insurance markets meet the needs of all consumers––the healthiest and the sickest, and do not impose an imbalance that hurts any one population of people.

Specifically, the executive order calls for consideration of:

  • Broadening the use of AHPs by allowing employers to form groups across state lines
  • Expanding the period of time STLDI is offered and renewed
  • Lifting current limitations on employer-funded HRAs that reimburse employees for health care expenses

In addition to the specific review of policies related to AHPs, STLDIs and HRAs, the executive order calls for a review of federal policy to:

  • “Re-inject competition into health care markets by lowering barriers to entry, limiting excessive consolidation, and preventing abuses of market power"
  • "Improve access to and the quality of information that Americans need to make informed health care decisions, including data about health care prices and outcomes, while minimizing reporting burdens on affected plans, providers, or payers.”

The HHS Secretary is required to provide a report to the President within four months, identifying other actions that can be taken to achieve the goals of promoting choice and competition.

The specifics of the policy that moves forward as a result of the executive order will be subject to public comment through the rulemaking process. HAP will be monitoring the advancement of regulatory policy with respect to insurance market rules and potential activity to promote competition and provide for greater transparency of information.

HAP’s guideposts in reviewing health care policy changes during the last year has been preserving Pennsylvanians’ ability to access and secure comprehensive, reliable health care coverage. Thanks to the ACA, more than 1.1 million Pennsylvanians have benefitted from coverage through the marketplace, Medicaid expansion, and dependent coverage.

HAP remains concerned regarding the ability of Pennsylvanians, particularly those with underlying health conditions, to afford health insurance, and the stability of the commonwealth’s health insurance marketplace. 

HAP has issued position papers—Stabilizing the Insurance Market and Addressing Insurance Rate Increases—calling for federal lawmakers to: 

  • Thoughtfully address the needs of Pennsylvanians with pre-existing conditions who do not otherwise have access to health coverage
  • Provide appropriate and sustained financing to meet the needs of these Pennsylvanians as well as those who experience significant health crises and need access to life-sustaining health care
  • Provide appropriate and sustained financing to support access to affordable health coverage for lower income Pennsylvanians
  • Address health care cost drivers through delivery system reform, value-based payments, and elimination of unnecessary regulatory burdens
  • Encourage health insurers to develop coverage that supports more coordinated and efficient care
  • Promote continuous coverage and market participation for consumers, so they do not opt out of coverage
  • Enhance consumer outreach and enrollment

Please contact Jolene Calla, HAPs vice president of health care finance and insurance, or Laura Stevens Kent, vice president of federal advocacy, with questions.

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