Yesterday, President Trump signed an executive order that threatens to undermine insurance markets around the country. It directs federal agencies to craft rules allowing broader use of Association Health Plans and short-term health insurance, creating large loopholes in the Affordable Care Act’s requirements around minimum benefits and protections for people with pre-existing conditions. Consumer and health advocates are urging California policymakers to pass legislation to limit these substandard plans, protect coverage, and prevent premium spikes.
This Executive Order is an audaciously destructive attempt to undermine insurance markets and consumer protections across the country. Creating these loopholes means that people will likely see increased premiums and limited choices, particularly those with pre-existing conditions, a group that Trump the Congressional leaders have repeatedly vowed to protect. It’s a lose-lose proposition. Healthy people will be lured into a substandard plan that may not actually cover the care they eventually need and the rest of us will be left in a smaller and sicker insurance pool facing higher premiums and fewer choices.
California law already limits short-term insurance to six months (185 days, and only one renewal) and regulates association health plans sold to small employers by imposing the same rules that apply to other health coverage sold to small businesses. The Trump executive order attempts to circumvent these state protections.
We cannot allow the federal government to jeopardize our state’s health care when we have the will and the wherewithal to protect our residents.
With the ACA framework and funding still intact, California lawmakers and regulators can work to withstand this latest attack. California can and should close as many loopholes as possible so that these junk insurance plans are not allowed to undermine our coverage and care. States have historically regulated insurance markets and set minimum consumer protections, and we will continue to do so with potential legislation this coming year.