Trump Signs Executive Order Promoting Health Care Changes, Lifts HRA Restrictions

President Trump signed an executive order (EO) on October 12 entitled Promoting Healthcare Choice and Competition Across the United States. Sen. Rand Paul, R-Ky., who has often been at odds with Republicans on health care, spoke at the signing, calling the EO the “biggest free market reform of health care in a generation.” The EO states that it seeks to improve choice and competition in the health insurance marketplace by prioritizing three areas for change: association health plans (AHPs); short-term, limited-duration insurance (STLDI); and health reimbursement arrangements (HRAs).

The EO, among other things, aims to expand employers’ ability to use tax-advantaged HRAs for their employees’ health care needs. “HRAs are employer-funded accounts that reimburse employees for healthcare expenses, including deductibles and copayments. The IRS does not count funds contributed to an HRA as taxable income,” the EO notes.

The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) places limits on the use of HRAs for health insurance, such as restricting their use for the payment of health insurance premiums. “They were previously popular among small businesses that wanted to reimburse their employees’ expenses, rather than offer group plans,” according to the EO.

The EO also direct that changes be made to allow AHPs to be offered across state lines, with more limited and, therefore, likely less expensive coverage, to small businesses and others who form groups to purchase health insurance. Changes to STLDI would expand the availability of that type of less-costly insurance available to more individuals.

Currently, one-third of all the counties in the U.S. have only a single insurance option and, next year, one half of all counties will have one insurer, and many will have none, according to Trump. In the coming months, the administration plans to take additional measures toward the stated goal of repealing and replacing the ACA, Trump told reporters. “We will continue to pressure Congress to repeal and replace the ACA,” he added.

Democratic lawmakers began criticizing the EO immediately after its signing. “Actions like these create extreme uncertainty that will undoubtedly saddle middle class families with higher cost, less coverage and fewer protections,” House Ways and Means ranking member Richard Neal, D-Mass., said in a statement. “I hope Republicans will join with Democrats to find bipartisan solutions to further strengthen our healthcare system to bring down costs, strengthen consumer protections and cover more Americans.”

Trump recently indicated his intention to work with Democrats on health care, having consistently voiced frustration with Republicans for failing to repeal and replace the ACA (TAXDAY, 2017/07/31, C.1). “”I called [Senate Minority Leader] Chuck Schumer, D-N.Y., yesterday to see if [Democrats] want to do a great health care bill. Obamacare is badly broken, big premiums. Who knows!” Trump said in an October 7 tweet.

By Jessica Jeane, Wolters Kluwer News Staff

Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States

Healthcare Executive Order Key Messages

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