The Trump administration is turning to regulations as their last, best hope of chipping away at ObamaCare in 2018, with congressional Republicans unlikely to pass full repeal.
A proposed rule released Thursday targeting the health law is likely the first step in a new effort to undermine the law. And advocates for the health law worry that another forthcoming rule could cause even more damage.
The administration on Thursday eased rules on small businesses that band together to buy health insurance, through what are known as association health plans (AHPs).
The proposal retains ObamaCare protections for people with pre-existing conditions and prohibits lifetime limits on benefits.
But it would allow associations to purchase cheaper health insurance that won’t cover the ten “essential health benefits,” which include mental health, substance abuse treatment, maternity care and prescription drugs.
A second proposed rule, yet to be unveiled, could have an even greater impact, with much broader exemptions from ObamaCare.
That rule is expected to lift the Obama administration’s restrictions on skimpy, short-term health insurance plans. The changes would allow the plans to last for 12 months and be renewed.
Experts expect the short-term plans to also be exempt from all of ObamaCare’s protections, meaning insurers would be able to charge higher premiums to people with pre-existing conditions.
The proposal on association plans is “aimed at putting AHPs on same footing as large employer plans. But large employer plans are still subject to various ACA requirements,” said Edward Leeds, an attorney at Ballard Spahr in Philadelphia.
The expected rule on short-term plans “would really go beyond that,” he added.
Together, the proposed rules have advocates for the health law worried about massive instability in the law’s insurance marketplace.
Experts and advocates warn the rules would lead to skyrocketing premiums and a major fragmentation of the insurance markets.
“Both of these rules would have the effect of seriously undercutting the viability of ObamaCare’s consumer protections by driving up premiums, and weakening the risk pools,” said Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.
President Trump has made no secret of his desire to undo as much of ObamaCare as possible. He’s said the law is failing, and on numerous occasions said the inevitable collapse of the insurance markets would bring Democrats to the negotiating table to work on a replacement.
When he signed an executive order loosening ObamaCare protections in October, Trump said he was “starting that process” to repeal the law.
It will be the “first steps to providing millions of Americans with ObamaCare relief,” he said of the order.
Administration officials said the order was just the beginning of their efforts to target ObamaCare, with Congress seemingly unable to repeal the law.
Republicans failed to repeal ObamaCare after a months-long struggle in 2017, and the obstacles now appear greater. The election of Sen. Doug Jones, a Democrat from Alabama, cut the GOP majority to a single seat, 51-49.
GOP lawmakers did get one win – repealing ObamaCare’s individual mandate in the Trump tax reform package.
It’s not yet clear what the mandate repeal will mean, but most expect it will also make premiums in the ObamaCare marketplace rise.
The individual mandate likely pushed some healthy individuals to buy insurance on the exchange. Without that financial penalty, they may not return.
“The repeal of the mandate and expansion of association health plans and the rise of short term plans will certainly send premiums rising for middle class people with pre-existing conditions, whose only option is the ACA-regulated market,” said Larry Levitt, a vice president at the Kaiser Family Foundation.
The new regulations can’t go as far as the policies in the various repeal bills, but Park said they can still do a lot of damage to the law.
“They’re all steps to undermine the market,” Park said.
Levitt said the administration appears to want to use regulations to create a parallel insurance market that “largely doesn’t have to follow the rules” of ObamaCare.
The administration has high hopes for their new effort.
In a recent interview in The New York Times, Trump said the ObamaCare regulations, combined with the repeal of the mandate, could accomplish his goal of bringing Democrats and Republicans together for a bipartisan compromise on a replacement bill.
“I believe that because of the individual mandate and the associations, the Democrats will and certainly should come to me and see if they can do a really great health care plan for the remaining people,” Trump said.
“This is the administration’s strategy, make it look like market reforms and marketplaces aren’t successful,” said Park.
“And that’s used as justification for further changes.”