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After three failed attempts by Congress to repeal Obamacare, President Donald Trump took matters into his own hands last week, signing an executive order reshaping how people get insurance through work and threatening to end federal subsidies to insurance companies under the Affordable Care Act.
"I just keep hearing repeal-replace, repeal-replace," Trump said while signing the order. "Well, we're starting that process." So what does the executive order do, and what could ending subsidies mean for your health coverage?
Trump's executive order is more of a request, asking the Labor Department to look into relaxing the rules that allow small companies to collectively buy the types of insurance plans normally only available to larger businesses. Governed by federal employment law, such association health plans may also have relaxed requirements about generosity or benefits and regulators might also have a tougher time ensuring that the insurers have the funds to pay their members' medical bills.
Additionally, small businesses unable or unwilling to join such associations could face higher premiums, and may look to pass those costs on to employees.
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In another move that could also cause insurance premiums to increase, the Trump administration reconsidered federal subsidies to insurance companies under the ACA, announcing, "the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare." Those payments, thought to be guaranteed to insurers under Obamacare, help lower out-of-pocket medical expenses for low-income consumers.
Without the subsidies, insurance companies could either increase their premiums or pull out of the ACA's insurance exchanges entirely next year. The end result of both policy changes could mean fewer people with health insurance, and additional costs for those who have it.
Opinion differs on how the changes will affect Obamacare long-term, but some states are already threatening to sue the administration to keep the subsidies in place.