The 2 actions Trump took on healthcare Thursday: 9 things to know

President Donald Trump signed an executive order Thursday morning to ease restrictions on association health plans, short-term insurance coverage and health reimbursement agreements. Later in the day, he ended cost-sharing reduction subsidies to insurers — a move that will take effect immediately with no transition period.

Here are nine things to know about the cost-sharing reductions and the executive order.

1. The Trump administration announced Thursday that it will no longer reimburse insurers for cost-sharing reductions, which help offset the cost of providing health insurance to low-income Americans on the exchanges.

2.The administration shared the following on its reasoning for the change: "Based on guidance from the Department of Justice, the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare. In light of this analysis, the Government cannot lawfully make the cost-sharing reduction payments."

3. The House of Representatives sued the Obama administration in 2014, claiming CSR payments to insurers were never appropriated by Congress, thus making them illegal. Judge Rosemary M. Collyer of the U.S. District Court in Washington sided with the House, finding Congress had never appropriated the money. The Obama administration appealed, arguing that there was in fact an appropriation. Since then, the Trump administration continued the payments from month to month, even though Mr. Trump has made his opposition to the payments clear.

4. The administration will discontinue the payments immediately. Without the payments, which were expected to total $9 billion next year, payers will likely increase premiums or exit the exchanges altogether in 2019, according to The New York Times. Payers already increased premiums for 2018 in anticipation of discontinued subsidies and are locked into providing coverage next year.

5. With his executive order on health plans, President Trump provided directions to several federal agencies to draft changes in their own regulations and align them to do three things: allow more employers to form association health plans, expand the maximum length of short-term health insurance coverage and increase the usability of HRAs and employers’ ability to offer HRAs.

6. Under part one, the EO directs the Labor Department to change its rules and allow small businesses in the same line of work or the same trade organization to band together and purchase insurance plans, according to The Hill. These Proposed association health plans would be exempt from ACA regulations, including essential benefit requirements, according to The Washington Post.

7. The order also instructs the HHS, the Treasury Department and the Labor Department to expand the limit on short-term health plans from their current three-month cap to 12 months.

8. President Trump also asked the agencies to reduce regulations on health reimbursement arrangements, which allow employers to put pre-tax dollars in employee accounts to cover future medical expenses. The order wants HRAs be able to help cover premium costs.

9. President Trump instructs HHS, the Labor Department and the Treasury Department to report to him within 60 days with their proposed rule changes for association and short-term plans, while he set a 120-day timeline for the HRAs. However, changes will likely not affect insurance coverage until 2019, according to The New York Times. The federal agencies must now go through a rule-making and comment process to implement the directives, which typically takes several months.  

More articles on leadership and management:

25 business rules
Do leaders need a formal degree, or are executive certificates okay?: 3 things to know
MemorialCare unveils new branding

 

 

© Copyright ASC COMMUNICATIONS 2017. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Top 40 Articles from the Past 6 Months