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On Oct.12, our incredible President Donald J. Trump kept one of his largest campaign promises by signing an executive order that officially promotes the choice for private citizens to buy insurance across state lines. Trump’s executive order is yet another big win for Americans, especially those who own small businesses. His administration is focusing on improving Association Health Plans (AHPs).
According to the executive order, large employers often are able to obtain better terms on health insurance for their employees than small employers because of their larger pools of insurable individuals across which they can spread risk and administrative costs. Expanding access to AHPs can help small businesses overcome this competitive disadvantage by allowing them to group together to self-insure or purchase large group health insurance.
Expanding access to AHPs will also allow more small businesses to avoid many of the Patient Protection and Affordable Care Act’s (PPACA) costly requirements. Expanding access to AHPs would provide more affordable health insurance options to many Americans, including hourly wage earners, farmers and the employees of small businesses and entrepreneurs that fuel economic growth.
When large companies go out into the market to find health insurance, they group all of their employees and go to insurance companies in their state to find the best deal, which is why when someone gets insurance through a big company, their pre-existing conditions are often covered. When a large quantity of people are pooled together, the money put in by those without pre-existing conditions is enough to cover the cost of those with them.
The president’s move allows employees who work for small businesses to pool together and find an insurance company that will cover all of them, just like big businesses do. Not only does it allow them to find insurance companies that work for them, it also allows them to look for these insurance companies across state lines, something that was never allowed before. The order also increases competition.
When you open up state lines and allow competition between companies to expand nationally, you lower the overall cost for the consumer. Simple economics dictates that a rise in competition leads to a lower price point. Now that private citizens are allowed to group together, pre-existing conditions can be covered for the same reason that they are covered when insurance is obtained through a big business.
President Trump’s executive order allows short-term, limited-duration insurance (STLDI), to be a viable option for individuals who do not get company based insurance. STLDI is exempt from the onerous and expensive insurance mandates and regulations included in title I of the PPACA.
This can make it an appealing and affordable alternative to government-run exchanges for many people without coverage available to them through their workplaces. The previous administration took steps to restrict access to this market by reducing the allowable coverage period from less than 12 months to less than three months and by preventing any extensions selected by the policyholder beyond three months of total coverage.
STLDI is a viable option for people that do not get their insurance through their employers, which is more affordable than government-run insurance. While Obamacare revoked this option from the American middle class, the Trump administration is bringing freedom back to the people by making STLDI an available option once again.
The executive order also helps employees gain health reimbursement arrangements (HRAs) through their employers. As opposed to their predecessors in the Obama administration, who prohibited employers from paying premiums or reimbursing their employees for the same, the Trump administration realizes that HRAs allow individuals more freedoms when it comes to their health insurance, something that was lost with Obamacare.
HRAs give millions of Americans more options when it comes to paying for their health care, giving them the potential to find more affordable and extensive coverage based on their needs. Obamacare forced Americans to choose between paying exploding premiums for government mandated health care, or paying ridiculous fines.
The biggest complaint about President Trump’s executive order is the fact that he cut subsidies. Subsidies were used to cut out of pocket costs for consumers’ co-pays and deductibles. The cuts affect the low and middle income customers, but what Trump’s critics forget is that the money these people do not pay out of pocket, they do pay through taxes. With everything else Trump’s executive order puts into place, citizens’ out of pocket costs will not rise.
When private citizens have the right to band together and cross state lines to get their insurance, they can form a big consumer pool. When a big consumer pool is formed, the cost drastically decreases for the individuals buying health care because more people are pooling their money together. Wouldn’t you rather pay $100 a month with nine of your coworkers than $1000 a month by yourself?
Thanks to the lowered cost per-individual, subsidies are being covered through larger plans. The more competition in the market, the cheaper the insurance will be for the consumer. This logic works for health care just as much as any product or service in basically any market.
The Obamacare regulations were unjust, expensive and quite frankly, un-American. They cost the American middle class tens of thousands of dollars a year. This horrendous law showcased the true totalitarian, anti-freedom culture of today’s mainstream American left, and proved how dangerous their policies can be. Thanks to President Trump’s executive order, Americans have more freedoms today than they did a week ago, which is something we should all be proud of.
