President Trump seeks expansion of certain healthcare arrangements
On Oct. 12, 2017, President Trump issued an executive order regarding three types of healthcare arrangements: association health plans (AHPs), short-term limited duration health insurance policies, and health reimbursement accounts. The executive order directs the various federal agencies that oversee these three arrangements to consider changing the current rules to facilitate increased use of these arrangements.
One goal of the Trump administration is to expand access to association health plans, also known as multiple-employer welfare arrangements or MEWAs. AHPs are group health plans sponsored by an association, such as a trade association or a Chamber of Commerce. AHPs allow small employers who are members of the association to join together to provide health coverage to their employees, thus being able to offer better coverage at lower costs due to economies of scale.
President Trump would also like to allow individuals buying short-term limited-duration health insurance to receive coverage for longer than three months and be able to renew the policies. In addition, he seeks to increase use of health reimbursement accounts by allowing more employers to reimburse employees for health insurance premiums and out-of-pocket medical expenses on a tax-advantaged basis.
The Trump administration intends to promote competition in healthcare markets, limit excessive consolidation throughout the healthcare system, and minimizing reporting burdens on health plans, providers, and payers. In addition, President Trump wants Americans to have more access to information that they need to make informed healthcare decisions.
Although the executive order communicates the goals of the Trump administration, it is up to the governmental agencies to take action to implement Trump’s agenda. Further developments may occur within the next few months.