Trump inks executive order to bypass Congress, undercut Obamacare

President Donald Trump on Thursday used his presidential powers to sign an order undermining the Affordable Care Act after fellow Republicans in Congress failed to repeal the 2010 law widely known as Obamacare.

Trump issued the executive order cutting off subsidies to health insurance companies for low-income patients.

The order is aimed at letting small businesses band together across state lines to buy cheaper, less regulated health plans for their employees with fewer benefits. Such new insurance options, however, may not be available until 2019, and the order could face legal challenges from Democratic state attorneys general.

The decision is the most dramatic action Trump has taken yet to weaken President Barack Obama's healthcare law, which extended insurance to 20 million Americans.

It was Trump's most concrete step to undo Obamacare since he took office in January promising to dismantle Democratic Obama's signature domestic policy achievement.

Trump, surrounded by top administration officials, business leaders and Sen Rand Paul (R-Kentucky), in the White House Roosevelt Room, praised his executive order as step towards repealing and replacing his predecessor's signature health care law. Trump, stuck with a Republican-led Congress that hasn't passed a bill to undo Obamacare, announced earlier this week that he is resorting to his "pen" instead.

''Since Congress can't get its act together on HealthCare, I will be using the power of the pen to give great HealthCare to many people – FAST,'' Trump had tweeted late on Tuesday.

"We've been hearing about the disaster of Obamacare for so long - in my case, many years, most of it outside in civilian life," Trump said after the White House signing ceremony. "And for a long period of time since I've started running and since I became president of the United States, I just keep hearing 'repeal and replace, repeal and replace.' Well, we're starting that process, and we're starting it in a very positive manner."

Trump said the order will cost the federal government "virtually nothing," and will force insurance companies to start "fighting" to sign people up for care.

"But the competition will be staggering," Trump said. "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."

''The cost of the Obamacare has been so outrageous, it is absolutely destroying everything in its wake,'' he added.

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

Later on Thursday, Politico reported that Trump plans to cut off subsidy payments to insurers selling Obamacare coverage, citing two people familiar with the matter. Trump has repeatedly threatened to stop the payments, which are made directly to insurance companies to help cover out-of-pocket medical expenses for low-income Americans enrolled in individual healthcare plans under Obamacare.

The payments are estimated at $7 billion in 2017. If Trump does eliminate the subsidy payments, premiums for many customers on the Obamacare individual insurance markets would be 20 per cent higher in 2018, the nonpartisan Congressional Budget Office has said.

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. Trump's order aims to give people more access to cheaper plans, which do not cover essential health benefits such as maternity and newborn care, prescription drugs, and mental health and addiction treatment. Obamacare requires most small business and individual health plans to cover those benefits.

Unlike large employers that can create their own health plans because their work forces are big enough to spread risk – mitigating the effect of individuals with serious illnesses – small employers have few options to offer reasonably priced health coverage. Allowing small employers to band together in associations is meant to give them options similar to larger companies, according to Reuters.

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

A spokesman for the National Federation of Independent Business, the largest small-business association in the country, said it would be watching ''how the regulatory architecture develops'' and make a determination in the future.

The order also sought to change an Obama-era limit on the time span that people can use short-term health insurance plans, which are cheaper but cover few medical benefits. Those plans are currently limited to three months.

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

Democratic state attorneys general have said they will sue if Trump tries to destroy Obamacare. California Attorney General Xavier Becerra said Trump's executive order is just another step toward imploding the Affordable Care Act.

''It should come as no surprise that California is prepared to fight in court to protect affordable healthcare for its people,'' Becerra said.

Trump has taken a number of other steps to weaken or undermine Obamacare. 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 enrollment period, which begins 1 November, 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.