Home » Trump’s Executive Order on Health Care – What Is It, Really?

Trump’s Executive Order on Health Care – What Is It, Really?

by Alex McGee

On Thursday, October 12th, President Donald Trump signed an executive order on health care. The order states that its purpose is to promote choice and competition across the United States, and is seen by most as an attempt to undermine Obamacare. While this stirred up a predictable headline frenzy in the media, many are wondering what the executive order actually does. Here’s a quick breakdown of the three policy changes in the order.

1. Expanding Access to Association Health Plans

Under Obamacare, many employers are required to provide an insurance plan to their employees. The order states that large employers are often able to negotiate better terms on their plan due to the larger pools of people, which spread risk and administrative costs. Association Health Plans would allow smaller businesses to get a similar benefit by banding together to purchase health plans as a group. For example, instead of three farmers each buying individual plans on the Obamacare market, they may agree to purchase one as a group for a better deal. The order argues that this will reduce costs and provide more options for many Americans.

2. Expanding Short-Term, Limited-Duration Insurance

Obamacare applies certain mandates and regulations to insurance plans. The executive order argues that these mandates increase costs. A short-term, limited-duration insurance is exempt from these mandates, and could, therefore, offer a cheaper option for those who must buy individual insurance plans.

3. Expanding Health Reimbursement Arrangements

Health Reimbursement Arrangements are tax-advantaged accounts that employers can make with their employees. Generally, these accounts allow employees and employers to contribute to this account to assist with out-of-pocket health care costs. The order argues that this offers employees more flexibility and choice with their health care.

Finally, the order states that it will continue to search for ways to promote competition in the healthcare markets throughout the system. The health care system should continue to offer alternatives to expensive mandated insurance plans, and increase competition and price information for Americans to assist them in making informed health care decisions. You can view the official text of the executive order on the White House website.

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