U.S. Senator Rand Paul (R-KY) (C) speaks with reporters about healthcare legislation outside the Senate floor at the U.S. Capitol in Washington, U.S. July 18, 2017. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) - U.S. Senator Rand Paul said he spoke to President Donald Trump by phone about healthcare reform on Monday and told the president he thought Trump had the authority to create associations that would allow organizations to offer group health insurance plans.

Paul, a Republican, told reporters that Trump was considering taking some form of executive action to address problems with the healthcare system after the Senate failed last week to pass a measure to reform the system.

Allowing groups like AARP, which represents retirees, to form health associations could enable individuals and small businesses to form larger groups to negotiate with health insurance companies for lower rates.