President Donald Trump says he is days away from passing a major health reform executive order inspired by Kentucky Senator Rand Paul — one of the fiercest Republican opponents of the most recent bill to repeal Obamacare.
The executive order appears to let virtually any group of people link together as a “health association” for insurance purposes. That would mean anyone from baristas to NRA members could form their own association and pool together to buy group insurance.
For libertarians like Paul, the proposal represents a free-market solution for individuals who don’t have group insurance through their work. But the policy is untested and there are questions about what impact it will have on people with preexisting health conditions.
Trump said the plan is currently being finished and will likely be signed soon.
“I'll probably be signing a very major executive order where people can go out, cross state lines, do lots of things and buy their own health care, and that will be probably signed next week,” he said Wednesday.
Paul said he has been working with the Trump administration for six months on the plan, and said it can be pulled off entirely through executive order. That means the White House would not have to go through Congress, where Obamacare repeal has stalled.
“This is a free market reform that will cost the federal government nothing, but has the possibility of allowing millions of people to get inexpensive insurance,” said Paul.
The pairing is surprising, given that Trump has spent the last several months bashing Republican opponents of various Obamacare repeal bills on Twitter and that Paul was the most vocal opponent of the most recent effort, which he helped to kill this week. Trump was harsher toward other senators than he was with Paul, who argued that the bill didn’t go far enough, however. In a tweet, he called the Kentucky senator “a friend of mine,” while saying he was “wrong” on the last health care bill.
How the proposal would actually play out is still uncertain. If a health association is able to self-select, the obvious incentive would be for healthy people to pool together and exclude sick people. People with preexisting health conditions tend to have higher health costs, and keeping them out of your pool would lead to lower premiums.
It also raises questions about what will happen to the individual markets. Obamacare guarantees access to insurance for everyone on these markets. If healthy people can pool together and leave in droves for the group market, that would mean higher costs for those who are left behind.
“It’s really hard to say much definitive without knowing the specifics of what the president may be doing,” said Larry Levitt of the Kaiser Family Foundation.
“There’s no inherent value in buying through an association as a group. That’s pretty much what the health insurance marketplaces provide now.”
Paul argues no new legislation would need to be passed and that Trump can do it on his own, through the Employee Retirement Income Security Act of 1974, which regulates employee benefit plans.