Timothy Murphy Discusses Health Care Choice and Competition Implications Following an Executive Order

MCOL ThoughtLeaders

Timothy J. Murphy, an Associate in the Health Care and Life Sciences practice, in the firm’s Washington, DC, office, was featured in MCOL ThoughtLeaders, and discussed the question: “What from your perspective will be the impact and implications of President Trump’s recent executive order on healthcare choice and competition?”

Following is an excerpt:

As a gating issue it is important to understand that the Executive Order does not make any changes to the current law. What the Order does do is instruct the agencies to review and if possible change various regulations and guidance to achieve the Order’s policy goals. The implementation process will likely take months and may ultimately face legal challenges from stakeholders.

That being said, if the agencies are able to implement the Order it is likely to increase health insurance options available to healthy individuals in the small group and individual markets, while increasing the cost of health insurance for those with greater health care needs in those markets. Fully implemented the Order would expand access to association health plans and short-term, limited duration insurance products. These plans or products do not have to comply with several ACA mandates, which would allow them to offer lower cost, less generous coverage which would appeal to younger healthier individuals. This could further segment the individual and small group markets by removing the younger healthier individuals who choose these alternatives from the risk pool, ultimately driving up premiums for the older less healthy individuals that remain.

Additionally, if fully implemented it will be hard to pinpoint the effect of the Order’s policies amid the myriad of other actions taken by the Trump administration which appear to be designed to exacerbate the risk pool diluting effects of the Order.