Sen. Rand Paul is taking a victory lap after President Donald Trump signed an executive order Thursday aimed at making it easier for small businesses to band together to buy health insurance outside the requirements of the Affordable Care Act or state insurance rules.
We can’t celebrate, though, because this change would likely enable insurers to cherry-pick young, healthy customers and sell them scrimpy plans, while older individuals with more complicated medical problems would again be priced out of the health-insurance market.
In that case, we’d be right back to the bad old days when the people who need health insurance the most couldn’t afford it and when too many people of all ages were surprised after an emergency to discover that their plan did not cover the care they needed. Bad insurance is no bargain even if it’s cheap.
After Senate Republicans struck out at repealing or replacing President Barack Obama’s signature health law, Trump is dismantling it through actions such as this order and by sabotaging insurance markets on which millions of Americans depend.
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Paul, who was one of three Republicans who doomed the most recent repeal attempt, has been urging Trump to embrace association plans in hopes of increasing competition among insurers, driving down costs and eliminating government subsidies. The Kentucky Republican was at the White House Thursday when Trump signed the order.
Despite what many experts say, Paul expresses confidence, perhaps naively, that association plans would not discriminate against people with pre-existing conditions and that the insurance would be comparable to large-group plans that cover employees of self-insured companies governed by a 1974 federal law. Paul also believes, again perhaps naively, that Americans in large-group plans are highly satisfied with their insurance.
Most Americans — 49 percent — are in group plans. Thirty-five percent are in Medicaid, Medicare or other government plans. Nine percent are uninsured, reports the Kaiser Family Foundation. Only 7 percent buy health insurance on the individual market, few enough that politicians easily ignore them.
It will be 2019 at the earliest before anyone could sign up under Trump’s order because the Labor Department must enact a rule implementing it. The order also would make it possible to buy bare-bones temporary health insurance for a year.
Meanwhile, individuals and small businesses still depend on the ACA insurance markets that Trump’s administration is undermining in various ways.
Paul hopes that self-employed individuals will become eligible for association plans but that could take a change in the law that only Congress can enact.
Paul, who said he hopes the individual market shrinks until it disappears, said Trump’s action “will allow the millions of people in the individual market an escape route to group insurance.” Paul envisions “million-person health associations (that) will have enormous leverage to get better prices for consumers.”
Paul’s argument for pooling a very large group of people to give them maximum clout in the health-care market is compelling. Take it to its logical end, and you have Sen. Bernie Sanders’ plan for a single-payer system.