Trump Administration Issues Executive Order Regarding Health Coverage and Discontinues Cost-Sharing Reductions Payments
October 13, 2017

On October 12, 2017, President Donald Trump signed an Executive Order “to reform the United States healthcare system to take the first steps to expand choices and alternatives to Obamacare plans and increase competition to bring down costs for consumers.”  The Executive Order directs the Secretary of Labor to consider proposing regulations or revising guidance to expand access to health coverage by allowing more employers to form Association Health Plans and directs the Secretaries of the Treasury, Labor and Health and Human Services to consider proposing regulations or revising guidance to expand the availability of Short-Term Limited-Duration Insurance and to increase the usability of Health Reimbursement Arrangements.  In a Statement regarding the Executive Order, the American Hospital Association warns that the “Executive Order will allow health insurance plans that cover fewer benefits and offer fewer consumer protections… In addition, these provisions could destabilize the individual and small group markets…”  The National Association of Insurance Commissioners issued a short Statement expressing concerns with expanding Association Health Plans in a manner that reduces consumer protections or solvency requirements.  An effective date for the proposed changes is unclear as the proposed rules will be subject to the federal rulemaking notice and public comment process.

Also on October 12, the U.S. Health and Human Services Acting Secretary Eric Hargan and Centers for Medicare & Medicaid Services Administrator Seema Verma released a statement announcing that cost-sharing reductions payments authorized by the Affordable Care Act will be discontinued immediately based on a legal opinion from the Attorney General.  New York Attorney General Eric Schneiderman released a Statement affirming that a coalition of states stands ready to sue if the Trump Administration cuts off the health care subsidies.

Locke Lord will be following these issues and publishing updates as these changes are implemented.


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