Today, President Trump signed an executive order to increase health insurance choices and decrease health insurance costs for millions of Americans. (here) The order will do several things.

The most important part of the order is to increase the use of association health plans (AHP) to allow more individuals and small groups the same advantages that large groups now enjoy in the health insurance market place. Large group insurance plans are regulated by the federal ERISA law and are not subject to all of the mandates and requirements in Obamacare.

AHPs have been used for years in a limited fashion, although over 400,000 Washingtonians receive their health insurance through AHPs. (here) The new executive order will allow more small groups as well as individuals to band together and form large groups. These plans will not have all of the often unnecessary benefit mandates forced on people in Obamacare. Consequently, costs will be less and plan choices will increase.

The second important part of the executive order is the extension of the time limit on temporary health insurance plans. These temporary plans are used by people changing jobs or by people leaving the job market and transitioning to Medicare or another health insurance plan. The Obama Administration installed an executive order that shortened the use of a plan to three months. The Trump order will allow these plans to be used for up to one year.

The objection to the Trump order is that young and healthy individuals will take advantage of these new plans. They will not sign up for health insurance in the Obamacare exchanges and will cause the demise of the Obamacare market place. The reality is that the Obamacare exchanges are in a death spiral anyway, caused by the fundamental disincentive structure of the law. Young and healthy people are priced out of the health insurance market because of ever-increasing prices in the exchanges. In Washington state alone, average prices in the exchanges are going up 23 percent in 2018 and fewer companies are offering plans than in 2017. (here)

Not only was Obamacare passed along strict party lines, but President Obama was very quick to use executive orders to advance his political agenda. President Trump’s executive order will be a start at correcting the onerous, predictable problems with Obamacare.