Trump administration spearheads health care reform
As we near the end of President Trump’s third year in office, it’s worth looking back at some of the health care policies enacted by this administration so far. Given that next year is an election year, it’s a safe bet that leaders from both parties won’t try to bring any major health care legislation to Congress. Setting aside the failure to repeal and replace the Affordable Care Act, or Obamacare, the Trump administration has produced a decent slate of health care policies that increase Americans’ choices for health coverage.
The Trump administration’s most substantial piece of health care policy was done through the legislative process — the repeal of Obamacare’s individual mandate. The individual mandate was a provision in Obamacare, which required every person in America, unless an exemption applied, to buy and retain health insurance coverage, or else pay a tax penalty. The repeal of the individual mandate was a part of the Tax Cuts and Jobs Act of 2017. Starting at the beginning of 2019, no one would have to pay the tax penalty for not possessing health insurance and instead could decide for themselves whether to obtain health insurance.
Ideally, Congress would use its constitutionally delegated authority to advance consumer-friendly health care reform bills. But partisan gridlock and disagreement about the future of the U.S. health care system have impeded efforts to do so, prompting the Trump administration to use executive authority to bring Americans some relief. The next three pieces of health care policy changes came via one executive order. In this order, the president directed specific federal agencies to issue new rules that would expand access to association health plans, short-term, limited-duration insurance, and health–reimbursement accounts. The Obama administration thwarted the use of all three of these arrangements.
Association health plans are large group health plans sold through an association to employer-members. Under this arrangement, small businesses and self-employed owners can band together and buy health insurance as a large group plan. Purchasing plans as a large group offers those who would traditionally buy health insurance in the small or individual group market new opportunities to buy coverage as a large group. North Carolina recently changed its insurance laws to accommodate the sale of these plans.
Short-term, limited-duration insurance has traditionally been used to supplement gaps in coverage, such as following a college graduation or the time between jobs. Historically, you could have short-term insurance for 12 months until the Obama administration limited it to a duration of three months. Short-term insurance isn’t subject to nearly as many insurance mandates as ACA-complaint plans, so these plans are generally a lot cheaper, but they don’t cover as many benefits. The Trump administration increased the duration back to 12 months and included the option to renew the plan for up to 36 months.
Health reimbursement accounts are like health savings accounts. They are a tax-advantaged account that can be funded by an employer to be used for qualified medical expenses. Before the Obama administration, HRA contributions could be used to purchase non-group health insurance. This option was curtailed by the essential health benefits and annual and lifetime limits placed on insurance plans. The new Trump rule would allow HRAs to be used again to buy health insurance separate from the group plan on the individual, thereby giving employees an extra choice of where to get health insurance other than their employer group plan.
Another executive order was signed in June. It focuses on many issues, but one on patient choice was the change to make a direct primary care membership fee a qualified health expense for a health savings account.
Under current law, a patient could only use HSA dollars on certain “qualified health expenses.” DPC physicians, doctors who don’t accept insurance and charges a small monthly fee to see patients, weren’t previously a qualified health expense. But given that monthly fees for DPC doctors vary from $50-$200, paring this arrangement with an HSA makes sense. President Trump directed the Treasury secretary to change the rules and allow that a DPC membership be considered a qualified expense. This means those who have an HAS, or who would prefer to see a DPC doctor, can use the already operational HSA to pay for the monthly membership.
Despite whether you support the president or agree with him politically; despite whether you support Obamacare; despite whether you support a single-payer system; the Trump administration has created meaningful new choices for American consumers and businesses to purchase health insurance that better fits their needs. One of the most significant flaws in Obamacare was treating each patient’s health care needs – a characteristic unique to each patient – with one-size-fits-all government plans. The Trump administration has increased the choices Americans have in buying health insurance.
Jordan Roberts is health policy analyst for the John Locke Foundation.