President Donald Trump has been vocal about his frustration with Congress’s inability to pass legislation to repeal and replace Obamacare. | Evan Vucci/AP Trump says health care executive order will allow coverage to be sold across state lines

President Donald Trump plans to sign an executive order this week aimed at expanding access to loosely regulated health insurance plans -- a move that could give consumers more coverage options but also destabilize Obamacare markets.

The order is expected to direct a trio of agencies to rewrite federal rules to allow trade associations and other groups offer their own health plans. Those so-called association health plans would be exempt from some of Obamacare's strict regulations and could be sold across state lines.


"They will be able to buy, they'll be able to cross state lines and they will get great competitive health care and it will cost the United States nothing," Trump said today. "With Congress the way it is, I decided to take it upon myself."

Trump is planning to sign the directive on Thursday, a source briefed on the plans said, in a move that would follow through on his repeated calls to open up the sale of health insurance across state lines. Republicans including Sens. Rand Paul and Mike Enzi have long championed association health plans as a way to lower insurance costs and give people more options.

The order likely won't contain many specifics on how the administration would pave the way for those alternative offerings. Instead, it's likely to leave it to the Labor, Treasury and Health and Human Services departments to reinterpret a sweeping employee health benefits regulation with an eye toward expanding coverage options for consumers.

It remains unclear how far the Trump administration will go in circumventing Obamacare's regulations to encourage sales of looser-regulated plans -- and exactly which rules association health plans would be exempt from.

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The Labor Department has already met with business trade groups about the planned executive order and begun work on reinterpreting federal regulations, two sources familiar with the matter said.

The Trump administration is separately looking into easing rules on short-term insurance policies, two sources familiar with the plans said. The Obama administration last year limited the length of those policies -- which also don't comply with Obamacare's rules -- to three months.

The rule change being explored now would restore insurers' ability to sell short-term policies that provide up to a year of coverage, effectively reestablishing them as a competitor to more robust Obamacare plans.

But already, insurers and policy experts have warned that allowing cheap, loosely regulated association health plans to flood the market would upset the Obamacare market's delicate balance and open the door to undermining key protections for people with pre-existing conditions.

Association health plans are already sold in some states but have to meet Obamacare's regulations. If the administration were to free them from those rules, those plans could charge far lower premiums for a skimpier set of benefits -- aiming to attract the healthiest and cheapest enrollees while potentially leaving Obamacare plans with higher-cost customers.

"It would deteriorate the risk pool, lead to increased premiums, more instability and potentially make insurers have to make decisions on whether they're going to continue to participate," said Cori Uccello, a senior health fellow at the American Academy of Actuaries.

Concerns about undermining Obamacare's patient protections -- including a ban on charging people more based on their health status -- helped sink multiple Republican efforts to repeal and replace the law.

But conservative Republicans including Paul have continued to insist that rolling back Obamacare's regulations are the only path to lowering premiums and increasing competition. And business groups are largely expected to back an attempt to expand the health coverage that trade associations can over to their members.

"Any effort to jump start this issue and provide more competition in the states, in the individual and small group market, is welcome," said Neil Trautwein, the vice president for health policy at the National Retail Federation.

Since congressional Republicans admitted defeat on repeal, Trump has been vocal about his frustration with the failure to deliver on a key campaign promise.

In an interview with Forbes published Tuesday morning, Trump reiterated his position that Obamacare is "a total mess" and insisted that while the healthcare law is now his responsibility, blame for its struggles fall entirely at the feet of his predecessor. "Obamacare is Obama's fault. It's never going to be our fault," Trump said.

"What we're doing is trying to keep it afloat, because it's failing," the president said. "I mean the insurance companies are fleeing and have fled. They fled before I got here. But with that being said, no, Obamacare is Obama's fault. It's nobody else's fault."