13 Oct 2017

Trump signs order weakening Obamacare

11:52 am on 13 October 2017

In a move undermining Obamacare after US Republicans failed to repeal it, US President Donald Trump has signed an order making it easier for Americans to buy bare-bones health insurance.

Mr Trump issued the executive order aimed at letting small businesses band together across state lines to buy cheaper, less regulated health plans for their employees with fewer benefits.

US President Donald Trump at the White House September 26, 2017.

US President Donald Trump signed an order to make it easier for Americans to buy bare-bones health insurance plans. Photo: AFP

With the ability to buy as a group across state lines, associations of small businesses can decrease their risk of having a large proportion of members with expensive illnesses, which can drive up costs.

The White House said it gave employers more leverage to negotiate with insurance companies in purchasing health insurance plans for employees.

Such new insurance options, however, may not be available until 2019, and the order could face legal challenges from some states' Democratic attorneys-general.

Joseph Antos, a healthcare expert at the conservative American Enterprise Institute think tank, said he did not believe the order would have much of an impact.

Health plans would be unlikely to be able to substantially cut costs because employers from regions with lower healthcare costs, like Iowa, would not want to join up with those from regions with higher healthcare costs, Mr Antos said.

"The claim before we saw any of this was that it was going to make affordable coverage available to tens of millions of people. That's clearly not the case."

Experts also questioned whether Mr Trump has the legal authority to expand association health plans.

The order also sought to change an Obama-era limit on the time span people can use short-term health insurance plans, which are cheaper but cover few medical benefits. Those plans are currently limited to three months.

Obamacare, known formally as the Affordable Care Act, requires most small business and individual health plans to cover those benefits.

The association health plans could attract young, healthy people and leave a sicker, more expensive patient pool in the individual insurance markets created under Obamacare, driving premiums still higher, which is a primary criticism against the law.

The American Hospital Association said Mr Trump's order "could destabilise the individual and small group markets, leaving millions of Americans who need comprehensive coverage to manage chronic and other pre-existing conditions, as well as protection against unforeseen illness and injury, without affordable options."

Small health insurers and state insurance regulators also criticised Mr Trump's move.

'Destroying everything'

It was Mr Trump's most concrete step to undo Obamacare since he took office in January. One of his promises was to dismantle Democratic former President Barack Obama's signature domestic policy achievement.

"The cost of the Obamacare has been so outrageous, it is absolutely destroying everything in its wake," Mr Trump said at a White House signing ceremony.

He said the move on Thursday was "only the beginning" and his administration would take additional steps. He said he would "pressure Congress very strongly to finish the repeal and the replace of Obamacare once and for all".

Senate Democratic leader Chuck Schumer accused Mr Trump of "using a wrecking ball to single-handedly rip apart our healthcare system."

"Having failed to repeal the law in Congress, the president is sabotaging the system," Mr Schumer said.

The House of Representatives in May passed Republican legislation to gut Obamacare, but attempts by Senate Republicans to repeal and replace the law failed in July and September, in part because the proposed legislation would have caused millions of Americans to lose healthcare coverage.

Republicans call Obamacare, which extended health insurance to 20 million people, a government intrusion into Americans' healthcare, and have been promising for seven years to scrap it.

Democratic state attorneys general have said they will sue if Mr Trump tries to destroy Obamacare. California Attorney General Xavier Becerra said Mr Trump's executive order is just another step toward imploding the Affordable Care Act.

"It should come as no surprise that California is prepared to fight in court to protect affordable healthcare for its people," Mr Becerra said.

Mr Trump has taken a number of other steps to weaken or undermine Obamacare. He has not committed to making billions of dollars of payments to insurers guaranteed under Obamacare, prompting many to exit the individual market or hike premiums for 2018.

The administration also halved the open enrolment period, which begins Nov. 1, slashed the Obamacare advertising and outreach budget, and allowed broad religious and moral exemptions to the law's mandate that employers provide coverage for women's birth control.

- Reuters

Get the RNZ app

for ad-free news and current affairs