September 28, 2017

Trump eyes executive order to sell plans across state lines

Daily Briefing

President Trump on Wednesday told reporters he is considering an executive order that would expand the ability of individuals to purchase health plans across state lines—a policy long championed by Republicans but typically disfavored by insurers.

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"I'll probably be signing a very major executive order where people can go out across state lines, do lots of things and buy their own health care," Trump said, adding, "It's gonna cover a lot of territory and a lot of people—millions of people."

The Affordable Care Act already allows states to enter compacts to permit the sale of individual health plans across state lines. According to the Washington Post, however, few insurers have elected to participate in part because insurance regulations vary by state and it can be costly and cumbersome for insurers to create plans that adhere to various state rules. State-led efforts also have failed for similar reasons, Politico reports.

Trump did not offer any details as to how his plan would differ from current law and allow insurers to sell plans across state lines. However, Sen. Rand Paul (R-Ky.), who has championed the effort, in an appearance on MSNBC's "Morning Joe," said the pending order likely would reinterpret provisions of the Employee Retirement Income Security Act (ERISA) regarding association health plans, which are often used by employers to offer plans to workers in different states.

Paul said, "I think it will be a reinterpretation of existing law with a more expansive definition of who can form an association" health plan under ERISA. According to a Health Affairs Blog post, association health plans are regulated differently in each state. 

Industry stakeholders

According to Politico, industry stakeholders generally have opposed the idea of loosening requirements to allow more individuals to purchase health plans across state lines.

State regulators have raised concerns that a national plan would reduce their authority over plans' regulation.

Mike Consedine, CEO of the National Association of Insurance Commissioners (NAIC), said, "Health insurers already have the ability to sell insurance in multiple states as long as they comply with state consumer protection and licensing laws, which many already do." He added, "The NAIC has long been opposed to any attempt to reduce or preempt state authority or weaken consumer protections."

Maryland Insurance Commissioner Al Redmer Jr., said, "I do not believe that state insurance commissioners, nor state legislatures or governors, will look kindly to anything that would pre-empt our ability to protect our consumers."

Further, some insurance experts have questioned whether an executive order would be able to supersede state regulations, Politico reports.

Washington Insurance Commissioner Mike Kreidler, said, "I just can't imagine it having that kind of impact. State law is going to supersede an executive order."

Meanwhile, University of California-Los Angeles Professor Mark Peterson questioned whether the effort would accomplish Republicans' reported goal of reducing insurance prices. "What drives cost of care is the cost of medical care. If I'm in California, which is an expensive medical care state, and I buy my insurance from Delaware, which is not, I'm still going to doctors and hospitals that are very expensive and the insurance plan is either going to cover that or not," he said.

Health reform talks resume next year?

Trump on Wednesday also indicated Republicans would hold another vote to repeal and replace the ACA in early 2018, after they have worked on tax reform.

"I am ... going to meet with Democrats and I will see if I can get a health care plan that's even better," Trump said. "So I will negotiate with Democrats, but from the Republican standpoint, we have the votes. We'll vote in January, February or March"  (Clason, "TrumpTracker," CQ HealthBeat, 9/27; Mason/ Cornwell, Reuters, 9/27; Demko/McCaskill, Politico, 9/27; Weixel, The Hill, 9/27; Peterson/Hackman, Wall Street Journal, 9/27; Eilperin/Winfield Cunningham, Washington Post, 9/27; Jost, Health Affairs Blog, 9/1).

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