KELLY MCEVERS, HOST:
Republicans in Congress have been promising their voters they would repeal the Affordable Care Act for years. Despite those promises, they've been unable to agree on how to overhaul President Obama's signature health care legislation. So today, President Trump took a shot. The president signed an executive order that says he will allow consumers and small businesses to band together and use to their combined market power to negotiate better deals for health insurance. Here's what he said.
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PRESIDENT DONALD TRUMP: The competition will be staggering. Insurance companies will be fighting to get every single person signed up. And you will be hopefully negotiating, negotiating, negotiating. And you'll get such low prices for such great care.
MCEVERS: In a moment, we'll hear how this executive order could affect people and the health insurance industry. First, NPR's health policy correspondent Alison Kodjak is with us to talk about the order itself. Hey, Alison.
ALISON KODJAK, BYLINE: Hey, Kelly.
MCEVERS: So what does the order do?
KODJAK: Well, I have been told several times today that the order itself doesn't really do anything to the health care system.
MCEVERS: OK.
KODJAK: But what it does do is direct three different federal agencies to look at their regulations around health insurance to try to make it easier for trade groups and small businesses to work together to negotiate with insurance companies for better deals. And those companies can be in different states. And they theoretically could get cheaper insurance than they do now. Small businesses today have to buy their insurance through their local Obamacare exchange.
MCEVERS: Right. I mean, it sounds like a reasonable concept. Is - will it work?
KODJAK: Well, there are a couple of challenges. And the first one is legal. There are a whole bunch of people - health care analysts, lawyers - that are saying essentially there are significant legal hurdles to creating what these - they're called association health plans - in a way that makes them cheaper than insurance that's already on the market. And these are people - Democrats and Republicans.
What would have to happen is the administration has to allow those small businesses to be governed by the rules of large employers. That would pretty much reverse a long history of legal precedent in how that law has been understood. The order says this outright. It encourages the agencies, as they say, to modernize their interpretation of the law. The second challenge is just that these plans are only cheaper if they cut benefits or exclude people who are sick or small businesses with a sicker employee group.
MCEVERS: I mean, why is that? Wouldn't their combined market power give them advantage - an advantage?
KODJAK: Well, not necessarily because today, small businesses already are sort of combining their market power through the Obamacare exchanges. They're buying in a group. All the businesses in D.C., for example - in Washington, D.C. - they have to buy on the Washington exchange. So there's not really a new strength in numbers that would come with these association plans. The advantage only comes if they include companies with younger people and leave out older, sicker people.
MCEVERS: These association plans weren't the only thing in this executive order, I understand. What else did the president put in there?
KODJAK: So he's trying to loosen rules regarding short-term insurance plans. And these are policies - right now they're limited to only 90 days, and they'd be good for up to a year. And I looked at some today on the market that are available now, and they have the deductibles as high as $10,000. They don't necessarily cover prescription drugs. And they don't have to cover you if you have a health history. So they're not the greatest insurance, and they don't fit the Obamacare consumer protections.
MCEVERS: Overall so far, what has been the reaction to this executive order?
KODJAK: Well, as I said, there's some skepticism about whether or not it's legal or can accomplish...
MCEVERS: Right.
KODJAK: ...Anything. And then there's this figure that it could split the market again to where it was before the Affordable Care Act was passed, which is, people who are healthy and young can get really cheap insurance, but people who need health care will find it really hard, expensive or out of reach.
MCEVERS: NPR health policy correspondent Alison Kodjak, thanks a lot.
KODJAK: Thanks, Kelly. Transcript provided by NPR, Copyright NPR.
