Obamacare: Here are two more ways Donald Trump plans to weaken the Affordable Care Act

Updated Sat at 3:52am

PHOTO: Donald Trump wants to make it easier for Americans to buy skimpier health insurance plans. (Reuters: Kevin Lamarque)

US President Donald Trump delivered two blows to Obamacare yesterday, both of which are expected to do serious damage.

Let's first take a look at the executive order he signed.

That order aims to make it easier for Americans to buy bare-bones health insurance plans, and critically, for small business employers to buy cheaper plans for their employees.

It aims to do so by:

• Making it easier for small businesses to join together as associations; and
• Lengthening the time limit for short-term health insurance plans

On allowing small businesses to form associations:

Simply speaking, Obamacare requires small businesses to provide their employees with health cover that includes essential health benefits, such as maternity and newborn care, prescription drugs, and mental health and addiction treatment.

Larger companies, however, are able to offer their employees less comprehensive plans.

By allowing small employers to band together in associations, they too will be afforded the option of buying cheaper plans for their employees.

On lengthening the time limit for short-term insurance plans:

Obamacare limits the amount of time people can use short-term health insurance plans, which are cheaper and cover fewer medical benefits, to three months.

Mr Trump's executive order, however, will see that extended to almost a year.

What could this mean for Obamacare?

These changes could destablise Obamacare because younger, healthy people may opt for the cheaper plans.

That will leave a sicker, more expensive patient pool in the individual insurance market, and drive up premiums.

These insurance options, however, may not be available until 2019, and the order could face legal challenges from Democratic state attorneys general.

And the second blow?

Shortly after signing the executive order, the US Department of Health and Human Services (HHS) also announced that Mr Trump would be scrapping federal subsidies for health insurers.

Those payments are guaranteed to insurers under Obamacare to help lower out-of-pocket medical expenses for people with low-to-modest incomes.

They can reduce a deductible of $US3,500 to a few hundred dollars and an estimated six million Americans qualify for the help.

Mr Trump has made the payments each month since taking office in January, but he has repeatedly threatened to cut them off and disparaged them as a "bailout" for insurance companies.

And that's because they're not cheap — they've cost the US Government about $US7 billion ($8.9 billion) so far this year.

What will THIS mean for Obamacare?

Experts say halting the payments will trigger a double-digit spike in premiums, on top of increases insurers already have planned for next year.

The nonpartisan Congressional Budget Office estimates a rise of 20 per cent.

That will deliver another blow to markets around the country, which are already fragile from insurers exiting and costs rising.

Insurers, hospitals, doctors' groups, state officials and the US Chamber of Commerce have all urged the administration to keep paying.

But the White House has said the Government cannot legally continue to pay the so-called cost-sharing subsidies because they lack a formal authorisation by Congress.

The action is likely to trigger a lawsuit from state attorneys general, who contend the subsidies to insurers are fully authorised by federal law, and say the President's position is reckless.

ABC/wires

Topics: healthcare-facilities, health, world-politics, government-and-politics, donald-trump, united-states

First posted Fri at 7:55pm