Congress has repeatedly failed to pass legislation replacing Obamacare, despite congressional Republicans having promised to do for the past seven years. Thankfully, the White House, with help from Sen. Rand Paul (R-Ky.), has decided to take health care reform into its own hands, announcing an executive order on Thursday that could provide tremendous relief for millions of families who are currently forced to pay thousands of dollars for expensive health insurance policies.
The primary way the executive order aims to improve the current system is by reinterpreting existing law so that individuals and small businesses can form associations that can purchase health insurance plans across state lines.
Under the current system, individuals without employer-provided insurance are stuck with whatever expensive options are available to them through an Obamacare exchange. President Donald Trump’s executive order empowers Americans by giving them the ability to buy health insurance as a group and to choose the cheapest plan available across multiple states, which is precisely what large corporations have been doing for years.
Individuals wouldn’t need to create new health care associations; existing associations could soon offer health insurance plans under the policy and allow their members to buy into it through the association. However, if individuals wanted to form new associations to take advantage of the policy change—including organizations that share religious, ideological, or cultural beliefs—they certainly could.
The importance of this policy change should not be understated. If associations, businesses, and individuals choose to take advantage of this opportunity, they will likely have access to some of the cheapest, best health insurance plans available, because they will have significantly more leverage to negotiate better health insurance rates and access to more health insurance products.
Some liberals have suggested this policy does nothing to help lower-income Americans, but nothing could be further from the truth. As Paul noted in an opinion article he published on Breitbart.com promoting the policy, “Many of the 28 million people left behind by Obamacare who still don’t have insurance work low-wage jobs in our fast food restaurants. The President’s decision today will allow workers from two million restaurants to come together to form a buying group and through sheer size get cheaper and better insurance.”
In addition to having more power to negotiate, this policy allows associations to buy plans that don’t have to comply with many of the costliest requirements imposed by the Affordable Care Act in Obamacare exchanges (because the association health insurance plans won’t be purchased in the exchanges).
What about people with pre-existing conditions? Group health insurance policies offer coverage to people within the group regardless of pre-existing conditions, so everyone in an association that offers a health insurance policy will be able to take advantage of the plan at the same price as the rest of the group.
Very poor people might be able to get greater access to health care under this policy change as well because associations with a charitable mission might be willing to provide assistance to those families in need so that they can afford an association health plan.
Perhaps best of all, this change will cost taxpayers absolutely nothing, because its benefits are completely dependent on free-market principles, not expensive, ineffective government-run social programs.
Trump and Paul’s policy is a fantastic first step toward fixing the broken Obamacare system, which has done nothing but make health insurance more expensive and pushed millions of people into inferior Medicaid plans, but that doesn’t mean Congress and states shouldn’t work to pass additional reforms.
Among many other policy changes, Congress should dramatically expand health savings accounts, give states autonomy in determining how to spend federal health care dollars, and repeal Obamacare’s disastrous regulations, including its essential health benefits requirements.
States can improve access to health care by applying to the Department of Health and Human Services for waivers to reform their Obamacare exchanges and Medicaid programs, allowing them to establish important policies such as Medicaid work requirements for able-bodied adults. States can also repeal their own costly essential health benefits mandates, eliminate certificate of need requirements, pass price-transparency laws, and create and/or expand health savings accounts, including for lower-income families.
Congress has yet to provide Americans with the health care reforms they have been demanding ever since Obamacare was forced on them by Democrats and the Obama administration in 2010. But, once again, the Trump administration has come to Americans’ rescue. By passing this important reform, President Trump is working toward keeping his promise to improve health care for all Americans. Now, it’s up to Congress and the states to finish the job!