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GOP touts flexibility; Dems fear cost increases
President Donald Trump on Thursday signed an executive order that he said will increase competition and lower costs for health insurance.
The order calls on agencies to adjust regulations in order to allow small businesses to join together and purchase insurance plans as a group and extend the duration of short-term plans.
According to The Associated Press:
• Association health plans will not be subject to the same regulations as plans offered through the Affordable Care Act (or Obamacare), meaning coverage may not be as extensive.
• Extending the duration of short-term plans to 364 days could provide another alternative to ACA, thus taking away more people from the marketplace.
Also Thursday, Trump announced his administration will halt cost-sharing reductions (CSR) payments, which are subsidies paid by the government to insurers that provide low-income Americans with reduced out-of-pocket costs for deductibles.
According to The Henry J. Kaiser Family Foundation, 57 percent of the 10.3 million Americans who purchased insurance under ACA received CSRs in 2017, including 47 percent of New Mexico's 45,372 enrollees.
Insurers are still required to offer the savings but now will not receive reimbursement from the government, which experts say will require an increase in premiums to offset the losses.
The decision to halt payments could cause insurers to leave the market starting in 2018, which could affect those looking for insurance through ACA, according to AP.
Trump's order to stop payment on CSRs will likely be subject to a court decision as attorney generals from 19 states, including New Mexico Attorney General Hector Balderas, plan to file a lawsuit against the decision to halt the subsidy payments.
Reaction from the nation's lawmakers predictably followed party lines.
Democratic Senator Martin Heinrich released a statement calling the decision to stop CSRs payments a "reckless attempt to sabotage our health care system" that "will increase premiums for everyone and disproportionately impacts middle-class and low-income families who rely on cost-sharing reduction payments."
Republican Rep. Steve Pearce praised the decision, saying, "Obamacare is broken, plain and simple. No amount of money can bail out or change this fact.
"The Obama Administration blatantly ignored the law to prop up the failures of our health-care system, and President Trump is changing that. Instead of bailing out giant insurance companies in the hopes of prolonging a failed system, we're working towards an insurance system that benefits New Mexicans with truly greater option and lower costs."
Pearce also approved of Thursday's executive order, as he released a statement saying it "will increase flexibility and choice while lowering the cost of insurance plans, allowing each group to find solutions that fit their needs."