USA: Legislative Update: Trump Administration Strikes Two Blows to the ACA

Last week US President Trump signed an executive order that could expand the availability of association health plans, and relax Affordable Care Act (ACA) rules requiring certain plans to offer essential health benefits, such as hospitalization, mental health services and prescription drug coverage.

Following the executive order, the administration announced late in the day that it will not pay cost-sharing reduction (CSR) subsidies to carriers offering coverage though the Exchanges. CSR subsidies help low-income consumers with out-of-pocket costs like deductibles and co-pays. Carriers generally advance these credits and get reimbursed from the federal government.

The administration’s announcement could create a mass exodus of carriers from the Exchanges. These two actions, the executive order and announcement about CSR subsidies, are widely viewed as the President’s next step in dismantling the ACA following Congress’ failure to pass repeal and replace legislation.

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