An Executive Order signed by President Trump aims to expand options and lower costs for Americans by potentially allowing citizens to purchase insurance across state lines. The move is a step towards reforming America’s costly and unsustainable Obamacare system, a system that has cost ordinary Americans and American businesses billions in unfair and oppressive taxes while delivering subpar services.
Under the new order, the Secretary of Labor is directed to consider expanded access to Association Healthcare Plans (AHPs). Expanding AHPs potentially allowing businesses to band together across state lines to offer their employees better coverage at a cheaper price in a larger, more competitive market. This long-overdue measure is welcome relief for small businesses which have suffered since Obamacare became law in 2010, when over 59% of companies with 25-49 workers offered their workers healthcare coverage. That figure has since dropped drastically by 14% with the number of companies with 1-24 workers offering healthcare coverage similarly dropping by 12% to just 32% today.
Short-term limited duration insurance, or STLDI, will also expand under the order. These plans are not subject to costly Obamacare regulations and are typically much cheaper – just a third of the cost of the cheapest Obamacare plan with broad provider networks and coverage limits. An Obama administration rule limits these plans to a 3 month duration. Repealing this rule will allow millions of Americans to access these plans, delivering immense utility and benefits especially for people between jobs, people in rural areas where coverage networks are limited, people who missed Obamacare’s open enrollment period and those living in thousands of US counties where only a single insurer offers exchange plans. This is a timely step given that by 2018, 1,500 counties of half of all US counties are projected to have only a single insurer offering exchange plans – denying over 2.6 million Americans a choice of insurer.
Finally, the order will aims to expand Healthcare Reimbursement Arrangements. HRAs are non-taxed, employer-funded accounts that reimburse workers for healthcare expenses including co-payments and deductibles. This will put power and control in the hands of millions of Americans who can seek flexible options tailored to their individual healthcare needs. HRAs were once popular among small businesses prior to draconian Obama-era regulations which restricted their use for insurance premiums.
The order is a welcome step against oppressive and costly Obamacare policy and taxes. Average premiums for individual health insurance plans have doubled between 2013 and 2017 and every state in the country using healthcare.gov has seen premiums rise, taking money out of the pockets of ordinary Americans.
Americans also continue to suffer from a swathe of shameless and corrosive Obamacare taxes including Health Savings Account taxes, individual mandate tax, high medical bills tax, health plan tax and even a tax on wheelchairs. The Health Insurance tax hits companies and is invariably passed on to consumers and firms, set to strip $130 billion over 10 years. Families seeking to manage their children’s healthcare needs through a pre-tax Flexible Savings Account face a tax if they exceed the low cap of $2,500. Other taxes are even more absurd – the tanning salon tax singles out these small businesses and has led to the closure of 10,000 tanning salons. A majority of tanning salons are owned by female entrepreneurs. Repealing these taxes will take a heavy and unfair burden off the shoulders of middle-class Americans and the firms who employ them.
In return for paying these taxes, we’ve received a substandard healthcare system which affords citizens few options and has seen millions of Americans departing Obamacare exchanges whilst copping a hefty legal penalty instead. Over 6.7 million people left Obamacare in 2015 alone. Current exchange enrollment is 60% below what the Congressional Budget Office predicted when the law took effect and 500,000 fewer Americans have enrolled in an Obamacare this year compared to 2016. In a particularly unconscionable state of affairs, over 37% of the households penalized for leaving Obamacare in 2015 made less than $25,000 a year and a whopping 79% made less than $50,000.
The evidence is clear that oppressive Obamacare policy and the taxes that fund it are hurting the poor, middle-class and those who deserve it the least. Though a welcome step, the Executive Order does not direct the agencies to adopt any particular rules but asks the agencies to consider expanding access to AHPs, STLDI, and HRAs to the extent consistent with law. A full repeal and replacement is the only solution for an unfair and broken system and it is time for congress and the senate to act.