A federal judge just smacked down Trump's Obamacare sabotage for the second time this week
President Donald Trump received a blow on Tuesday when a federal judge struck down strict Medicaid work requirements in Kentucky and Arkansas. The ruling set back the administration's efforts to let states waive Medicaid rules to disenroll thousands of people and sabotage the Medicaid expansion of the Affordable Care Act, commonly known as "Obamacare."
Then just 24 hours later, another federal judge voided a different part of Trump's ACA sabotage efforts: the expansion of so-called "association health plans," ruling that the administration lacked the executive authority to change the legal classification of these plans.
An association health plan is an policy created by several small employers banding together to provide coverage to all the employees collectively. Under current law, these plans can only be formed by a small group of very similar businesses, like a restaurant franchise. But Trump's Labor Department drafted a new rule to allow basically any group of businesses to band together into an association. The new rules would also reclassify association plans from more regulated "small group" plans to less regulated "large group" plans — thus creating a new avenue for cheap junk insurance policies that could theoretically pull people away from buying full coverage on the health insurance exchanges.
As health care blogger Charles Gaga explained on ACASignups.net, before the ACA, anyone could form an "association" and they were a common front for fraud — from 2000 to 2002 alone, the Government Accountability Office identified some 144 health associations covering 15,000 employers and 200,000 policyholders were either outright pyramid schemes or set premiums too low and became insolvent, resulting in some $252 million in medical claims going unpaid and patients filing for bankruptcy.
In fact, thanks to a loophole in the ACA, Tennessee already has a major association health plan of the kind Trump wants to legalize, known as the Farm Bureau. 23,000 people are enrolled in these skimpy, low-cost plans — with the result that Tennessee's individual insurance markets are underutilized and premiums are high.
Even though all of this is terrible for consumers, Trump saw it as a perfect way to kill President Barack Obama's signature health care reform after his repeal efforts died in Congress. The president is doing whatever he can to short-circuit the ACA, from withholding insurer payments to cutting open enrollment to supporting a multi-state lawsuit to strike down the law entirely.
But as this week demonstrated, much of his sabotage is hitting a brick wall in the federal courts.
