Donald Trump accused of 'ripping apart' health system after he signs executive order to circumvent Obamacare

Donald Trump accused of 'ripping apart' health system after he signs executive order to circumvent Obamacare

Donald Trump accused of 'ripping apart' health system after he signs executive order to circumvent Obamacare

Updated 13 October 2017, 16:35 AEDT

President Donald Trump signs an executive order — with a little prodding from Vice President Mike Pence — making it easier for employers to buy bare-bones health insurance plans for their employees, using his presidential powers to undermine Obamacare.

United States President Donald Trump has signed an executive order making it easier for employers to buy bare-bones health insurance plans for employees, using his presidential powers to undermine Obamacare after fellow Republicans in Congress failed to repeal the 2010 law.

Mr Trump issued the order overnight aiming to allow small businesses to band together across state lines to buy cheaper, less regulated health plans for their employees with fewer benefits.

The President initially appeared to forget after his announcement that he was yet to sign the order, with Vice President Mike Pence grabbing him by the shoulder to remind him.

The move marks Mr Trump's most concrete step to undo Obamacare since he took office in January, promising to dismantle Democratic former president Barack Obama's signature domestic policy achievement.

What is Obamacare?

  • Affordable Care Act passed by Congress in 2010
  • Promised to help tens of millions of uninsured Americans get health coverage
  • Under the plan, people can buy cheap insurance on healthcare.gov
  • Most coverage costs less than $US100 per month
  • Policies vary according to person's income, location, family size and level of coverage desired
  • More than 10 million people now have medical cover under the laws
  • Number of uninsured adults reduced by 26 per cent

Senate Democratic leader Chuck Schumer accused Mr Trump of "using a wrecking ball to single-handedly rip apart our healthcare system".

"Having failed to repeal the law in Congress, the president is sabotaging the system," Mr Schumer said.

The House of Representatives passed Republican legislation in May to gut Obamacare, but attempts by Senate Republicans to repeal and replace Obamacare failed in July and September, in part because the proposed legislation would have caused millions of Americans to lose healthcare coverage.

Republicans call Obamacare, which extended health insurance to 20 million people, a government intrusion into Americans' healthcare, and have been promising for seven years to scrap it.

Mr Trump's order weakens Obamacare in part by giving people more access to plans that do not cover essential health benefits such as maternity and newborn care, prescription drugs, and mental health and addiction treatment — such new insurance options, however, may not be available until 2019, and the order could face legal challenges from Democratic state attorneys general.

'Finish Obamacare once and for all': Trump

Obamacare, known formally as the Affordable Care Act, requires most small business and individual health plans to cover those benefits.

The executive order essentially allows small businesses to join together as "associations" forming larger groups.

When buying insurance as a large group, these associations can decrease their risk of having a large proportion of members with expensive illnesses, which can drive up costs for small employers.

"The cost of the Obamacare has been so outrageous, it is absolutely destroying everything in its wake," Mr Trump said at a White House signing ceremony.

The White House also said the order gives employers more leverage to negotiate with insurance companies in purchasing health insurance plans for employees.

Mr Trump added that the move was "only the beginning" and that his administration would be making additional steps while adding he would "pressure Congress very strongly to finish the repeal and the replace of Obamacare once and for all".

However, Joseph Antos, a healthcare expert at the conservative American Enterprise Institute think tank, said he did not believe the order would have much of an impact.

Health plans would be unlikely to be able to substantially cut costs because employers from regions with lower healthcare costs, like Iowa, would not want to join up with those from regions with higher healthcare costs, Mr Antos said.

"The claim before we saw any of this was that it was going to make affordable coverage available to tens of millions of people … that's clearly not the case," Mr Antos said.

Experts also questioned whether Mr Trump has the legal authority to expand association health plans.

The US President has taken a number of other steps to weaken or undermine Obamacare — for example, he has not committed to making billions of dollars of payments to insurers guaranteed under Obamacare, prompting many to exit the individual market or hike premiums for 2018.

The administration also halved the open enrolment period, which begins November 1, slashed the Obamacare advertising and outreach budget, and allowed broad religious and moral exemptions to the law's mandate that employers provide coverage for women's birth control.

Reuters