At the first presidential debate on September 29, moderator Chris Wallace asked President Trump, “What is the Trump healthcare plan?”
In the weeks since, the president’s team hasn’t exactly been forthcoming with details. But President Trump has hardly been inactive on health care during his term. In fact, his administration has taken a number of important but underappreciated steps to boost consumer choice and affordability in the healthcare marketplace.
Take the administration’s 2018 rule expanding access to association health plans. Under these plans, groups of small businesses or self-employed workers can band together to enroll in large-group insurance coverage. In some instances, a large-group plan can offer savings of nearly 20% compared to a small-group plan with the same benefits.
Before the rule was promulgated, small businesses had to have a “commonality of interest” aside from providing health insurance in order to sponsor an association plan. They also had to have at least one employee, so self-employed workers couldn’t join.
The administration’s rule relaxed those restrictions—and opened the door for small firms to bargain with insurers for lower prices and better terms on their health insurance.
The results were immediate—nearly 30 new association health plans popped up in the seven months after the Department of Labor finalized the rule. Some of those plans featured premiums that cost up to 35% less than those on the Obamacare exchanges.
But the future of the association health plan rule is not clear. In 2019, the U.S. District Court for the District of Columbia invalidated the rule. The Trump administration appealed to the U.S. Court of Appeals for the D.C. Circuit, but the case has not yet been resolved.
President Trump’s team has also tried to expand access to affordable coverage for individuals. A 2018 rule issued by the administration extended the maximum duration of short-term health plans to one year, up from the Obama administration’s maximum of three months. The rule also allowed insurers to renew short-term plans for up to three years.
Short-term health plans are not subject to Obamacare’s cost-inflating mandates and regulations. So they tend to be much less expensive than the coverage available on the individual-market exchanges.
According to a 2019 study published by the Manhattan Institute, a typical short-term plan premium for a 30-year-old nonsmoker in Fulton County, Georgia—home to Atlanta—was $209 a month, with a $5,000 deductible and a $7,000 out-of-pocket maximum. A comparable exchange plan, with a slightly higher deductible and out-of-pocket maximum, was $296 a month.
The savings can be even bigger for more comprehensive plans. Per the Manhattan Institute study, a mid-level silver plan on the exchange runs $467 a month; a comparable one-year short-term plan is $250 a month.
Unfortunately, many states prevent their residents from taking advantage of the administration’s new short-term rule. In 11 states, short-term plans are not available, whether because they’re banned outright or regulations are so strict that insurers won’t set up shop. Twenty states and the District of Columbia have put in place more stringent curbs than the Trump administration rule.
Trump’s third big healthcare achievement was the expansion of health reimbursement arrangements in 2019. HRAs allow employers to set aside money tax-free for individual workers to spend on health insurance. They effectively transform health insurance from a defined benefit the employer controls to a defined contribution the worker controls.
HRAs can be win-win for employers and employees. They can insulate employers from the ceaseless rise in the cost of health insurance. Firms can decide how much they have to spend on health benefits and then empower their employees to do with those funds as they please.
Employees, meanwhile, can purchase coverage that suits their needs, not their employers’. Because they purchase their benefits directly, individuals can take their coverage with them if they leave their job.
The White House expects more than 11.4 million Americans will be enrolled in HRAs by 2029, including 800,000 people who were previously uninsured. That could unleash a wave of price-lowering, quality-enhancing competition in the individual insurance market.
Altogether, the Trump administration estimates that its rule changes will provide an additional two million Americans with coverage.
The Trump administration has given Americans access to more affordable health insurance options. That’s a record worth defending—and building upon.
Here’s What’s In Trump’s Healthcare Plan
Sally C. Pipes
At the first presidential debate on September 29, moderator Chris Wallace asked President Trump, “What is the Trump healthcare plan?”
In the weeks since, the president’s team hasn’t exactly been forthcoming with details. But President Trump has hardly been inactive on health care during his term. In fact, his administration has taken a number of important but underappreciated steps to boost consumer choice and affordability in the healthcare marketplace.
Take the administration’s 2018 rule expanding access to association health plans. Under these plans, groups of small businesses or self-employed workers can band together to enroll in large-group insurance coverage. In some instances, a large-group plan can offer savings of nearly 20% compared to a small-group plan with the same benefits.
Before the rule was promulgated, small businesses had to have a “commonality of interest” aside from providing health insurance in order to sponsor an association plan. They also had to have at least one employee, so self-employed workers couldn’t join.
The administration’s rule relaxed those restrictions—and opened the door for small firms to bargain with insurers for lower prices and better terms on their health insurance.
The results were immediate—nearly 30 new association health plans popped up in the seven months after the Department of Labor finalized the rule. Some of those plans featured premiums that cost up to 35% less than those on the Obamacare exchanges.
But the future of the association health plan rule is not clear. In 2019, the U.S. District Court for the District of Columbia invalidated the rule. The Trump administration appealed to the U.S. Court of Appeals for the D.C. Circuit, but the case has not yet been resolved.
President Trump’s team has also tried to expand access to affordable coverage for individuals. A 2018 rule issued by the administration extended the maximum duration of short-term health plans to one year, up from the Obama administration’s maximum of three months. The rule also allowed insurers to renew short-term plans for up to three years.
Short-term health plans are not subject to Obamacare’s cost-inflating mandates and regulations. So they tend to be much less expensive than the coverage available on the individual-market exchanges.
According to a 2019 study published by the Manhattan Institute, a typical short-term plan premium for a 30-year-old nonsmoker in Fulton County, Georgia—home to Atlanta—was $209 a month, with a $5,000 deductible and a $7,000 out-of-pocket maximum. A comparable exchange plan, with a slightly higher deductible and out-of-pocket maximum, was $296 a month.
The savings can be even bigger for more comprehensive plans. Per the Manhattan Institute study, a mid-level silver plan on the exchange runs $467 a month; a comparable one-year short-term plan is $250 a month.
Unfortunately, many states prevent their residents from taking advantage of the administration’s new short-term rule. In 11 states, short-term plans are not available, whether because they’re banned outright or regulations are so strict that insurers won’t set up shop. Twenty states and the District of Columbia have put in place more stringent curbs than the Trump administration rule.
Trump’s third big healthcare achievement was the expansion of health reimbursement arrangements in 2019. HRAs allow employers to set aside money tax-free for individual workers to spend on health insurance. They effectively transform health insurance from a defined benefit the employer controls to a defined contribution the worker controls.
HRAs can be win-win for employers and employees. They can insulate employers from the ceaseless rise in the cost of health insurance. Firms can decide how much they have to spend on health benefits and then empower their employees to do with those funds as they please.
Employees, meanwhile, can purchase coverage that suits their needs, not their employers’. Because they purchase their benefits directly, individuals can take their coverage with them if they leave their job.
The White House expects more than 11.4 million Americans will be enrolled in HRAs by 2029, including 800,000 people who were previously uninsured. That could unleash a wave of price-lowering, quality-enhancing competition in the individual insurance market.
Altogether, the Trump administration estimates that its rule changes will provide an additional two million Americans with coverage.
The Trump administration has given Americans access to more affordable health insurance options. That’s a record worth defending—and building upon.
Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.