President Trump Says He's Going To Sign Executive Order On Healthcare--And That's Not Okay

President Trump Says He's Going To Sign Executive Order On Healthcare--And That's Not Okay
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Updated 10 months ago

With the latest repeal attempt of the Affordable Care Act now officially dead in the water, President Trump has decided to bypass the system.

On Wednesday he told reporters:

"I'll probably be signing a very major executive order where people can go out, cross state lines, do lots of things and buy their own health care, and that will be probably signed next week. It's being finished now. It's going to cover a lot of territory and a lot of people. Millions of people."

This shift in tactics was hinted at by Senator Rand Paul in an interview with MSNBC on Wednesday:

"I believe President Trump can legalize on his own the ability of individuals to join a group or health association across state lines to buy insurance. This would bring enormous leverage to bringing down prices. It would also bring protection to individuals who feel left out, hung out to dry, basically."

Here's the thing though: some states already allow it. Insurers just haven't taken them up on the offer. 

While the idea sounds good in theory, insurance companies and regulators haven't been so keen on it, especially since a state with skimpy regulation and lower premiums could sell plans to people in states with more regulation and higher premiums and only have to adhere to its own state's set of rules.

One of the main reasons that opponents have criticized the concept is that healthy individuals could leave sicker individuals out to dry by leaving insurance pools for cheaper policies, thus increasing premiums for the remaining sick individuals. Similarly, sick individuals could all flock to states that require insurers to provide more medical services, resulting in higher premium rates for people in those markets. Not to mention the headache it could cause insurers who have to try to set up networks in multiple states.

Once word spread on Twitter, people were a bit baffled:

But some say the executive order is still a huge cause of concern, since it basically would undermine the individual and small group markets.

Mila Kofman, executive director of the District of Columbia health exchange, told Buzzfeed News:

"I would compare it to repealing the ACA without Congress. If you allow these entities to cherry pick the healthy people out of the individual market … you’ll have marketplaces with only sick people left in them. And a market risk pool can’t survive with only sick people in it."

Senator Paul should know this since just such a "death spiral" happened in his home state of Kentucky in the mid-90s. As premiums rose in the regulated market due to individuals fleeing to the cheaper unregulated market, the healthcare system in Kentucky all but collapsed.

So, basically, Trump's plan could spell disaster for healthcare as we know it.

Mark Hall, the director of health law at Wake Forest University, summed it up pretty well: 

"We’ve seen this happen time and time again. It’s a lesson we should have learned long before. I can only hope those putting together this approach have studied the lessons of the past."