President Trump's Obamacare Executive Order Could Make Sick People Pay More

WASHINGTON, DC — After the repeated defeats of "repeal and replace" bills in Congress, President Trump plans to sign an executive order on the Affordable Care Act, known more commonly as Obamacare, Thursday morning, wielding the power of the executive where his legislative efforts have failed.

While the details of the new plan have not yet been revealed, the administration has made broad outlines of its approach clear — and many experts warn the efforts could fracture the health insurance market.

Essentially, the Trump administration is likely to use executive authority to open up association health plans and short-term plans, which are not subject to the traditional regulations that apply to insurance. This means the plans could be cheaper — but they would also be much skimpier, with less coverage for many medical conditions people expect their health insurance to include.

Watch: Trump's New Executive Order Aims To Expand Health Care Options

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University of Michigan Law Professor Nicholas Bagley, discussing leaked information on the executive order, said that its provisions are relatively light on substance. It largely hands authority over to the Labor Department and the Department of Health and Human Services to whittle away at some of Obamacare's regulations.

Republicans favor loosening regulations on health insurance because, they argue, it will give consumers more choices and bring down costs. However, having two types of insurance — loosely regulated association plans and traditional Obamacare-compliant plans — could split the market in two, with sicker people choosing to stay in the Obamacare plans and healthy people getting association plans.

While young and healthy people would end up paying a lot less for health care, premiums for older and sicker people would soar.

Small businesses with an older or less healthy workforce also may have to pay more. If, for instance, a bunch of dry cleaners buy coverage through an association, the insurer may set separate prices for each based on employee health, noted Kevin Lucia, another Georgetown professor.

Consumer protection also may suffer. Federal regulators generally have fewer resources for investigating complaints or helping consumers than their state counterparts, said Mila Kofman, executive director of the D.C. Health Benefit Exchange.

Little will change immediately, however. It typically takes government agencies several months to carry out presidential directives, since they generally must follow a notice-and-comment process. Any regulation also might encounter legal challenges or resistance from parties like state insurance regulators.

The sign-up season for 2018 individual health insurance starts Nov. 1. It is unlikely any changes would happen by then.

The Associated Press contributed to this report.

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