President Trump signed an executive order today to ease restrictions on association health plans in the Affordable Care Act (ACA), allowing them to offer small businesses cheaper, skimpier plans than they can now buy on the state insurance exchanges. Although it is unclear whether self-employed individuals will be able to buy into these association plans, observers say that the regulations that will be written to implement the executive order might include these individuals as well. Currently, association health plans, which represent small firms of a similar type, are subject to the ACA benefit mandates and are confined to single states. Under the executive order, these plans could cross state lines, potentially creating much larger insurance groups. As such, they would be considered in the same category as large employers, which are not subject to the ACA's essential benefit requirements. They would also escape the ACA's limits on consumers' yearly and lifetime costs and its ban on charging higher rates to people with preexisting conditions. Critics of the move to lift restrictions on association health plans say that they would attract relatively healthy people away from the state-based insurance exchanges. As a result, insurers would have to raise rates for the ACA exchange plans, potentially leading to a "death spiral" as the number of sick people who are members increases. The executive order also requires that insurers be allowed to sell short-term insurance plans that remain in effect for up to 364 days. The ACA limits the duration of those individual plans, which are exempt from most ACA requirements, to just 3 months. The changes that Trump ordered will not be implemented in time to make any difference in the ACA insurance marketplaces this year. The enrollment period for ACA plans begins November 1 and ends December 15. Source
