President Donald Trump may be eager to dismantle the Affordable Care Act after months of failed GOP repeal efforts, but his promise to provide millions of Americans "with Obamacare relief" with the executive order he signed Thursday is sure to collide with the slow grind of the federal bureaucracy.

Trump’s order directs a trio of federal agencies to rewrite regulations to encourage the rise of a raft of cheap, loosely regulated health insurance plans that don't have to comply with certain Obamacare consumer protections and benefit rules. They're expected to attract younger and healthier people — leaving older and sicker ones in the Obamacare markets facing higher and higher costs.


"I just keep hearing repeal, replace, repeal, replace," the president said as he announced what he vowed would be the first of a series of initiatives to put his own free-market stamp on the health care system. "Well, we're starting that process."

But despite the high-flown rhetoric, nothing will change immediately. “This is only an executive order,” said Tim Jost, professor emeritus at the Washington and Lee University School of Law. “It is not a change in the law or even in regulations. It is a direction to draft rules.”

As a result, there's likely to be little effect on the Obamacare markets set to open their fifth enrollment period in several weeks — and that Trump has repeatedly trashed for sticking Americans with skyrocketing premiums and dwindling competitions.

“There’s not an immediate change,” said Anne Phelps, U.S. health care regulatory leader at Deloitte. “This is going to need to go through the regulatory process. There’s some time here.”

POLITICO Pulse newsletter Get the latest on the health care fight, every weekday morning — in your inbox. Email Sign Up By signing up you agree to receive email newsletters or alerts from POLITICO. You can unsubscribe at any time. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

That process is likely to be accelerated compared with the typical government trudge toward publishing new regulations. The Labor Department is already far along on rewriting ERISA to expand association health plans, said several sources familiar with the process.

A senior administration official declined to provide a timeline for the rulemaking on Thursday, but said the goal is to "get these done as quickly as possible."

Even so, the official stressed that the agencies would publish the proposed rules and invite public comment before finalizing them — effectively eliminating any chance that they're completed before the end of the year.

"This thing doesn't do anything on its own," said John Gorman, a consultant who works with several insurance companies. "What it is is the most wrongheaded, stupid list of policies that I've seen in recent memory."

Under even the best-case scenario for the administration, the changes would be unlikely to affect the 2018 Obamacare markets, which take effect on Jan. 1, although some changes may take effect mid-year.

The focus of the directive is association health plans, which allow small-business owners, trade groups and others to band together to purchase health insurance. Such plans would be exempt from certain Obamacare rules, including requirements that they cover standard benefits, such as prescription drugs.

The administration is also preparing to expand the sale of stopgap policies, which don't cover pre-existing conditions, mental health services and many other costly benefits. Coverage could extend for as long as a year, up from a current three-month limit.

If successful, the new rules could upend the way businesses and individuals buy coverage — lowering premiums for the healthiest Americans at the expense of key consumer protections. And depending on how far the administration goes, it could risk tipping the Obamacare markets into a tailspin, as healthier individuals flee the for cheaper, deregulated plans, driving up costs for the sicker individuals left behind.

Before anything can happen, though, lawyers must grapple with knotty regulatory questions that could ripple through the health system. The order gives the administration broad leeway to reinterpret what types of groups, for instance, can band together as an association to purchase cheaper coverage that's exempt from some of Obamacare's regulatory standards.

That definition isn't settled, and conservative boosters like Sen. Rand Paul have pushed for opening up association health plans as wide as possible, potentially even including individuals.

Administration officials say they're still looking at the question. But the possibility has stoked fears that the changes would spur a deregulated health insurance system that competes for the same customers as the Obamacare markets, which would be potentially destabilizing for Obamacare.

"How that doesn't get challenged, how that isn't such an expansive interpretation of ERISA that goes beyond the administration's authority — someone's absolutely going to" bring a legal challenge, said an insurance industry official, who requested anonymity to discuss strategy. "This is chaos."

Soon after Trump signed the executive order, New York Attorney General Eric Schneiderman threatened to sue the administration if it oversteps its executive power.

"President Trump now appears to be trying to accomplish by executive fiat what he could not through Congress," Schneiderman said in a statement. "If the Trump administration takes any action that violates the law — or tramples on New Yorkers' constitutional rights — we will take them to court."

Republicans frequently fought former President Barack Obama's executive orders and rulemaking, most notably winning a court case over that administration's funding of cost-sharing subsidies under Obamacare.

Trump — who repeatedly criticized Obama's reliance on executive orders — has since threatened to eliminate that funding, contributing to insurers' decisions to hike premiums on the Obamacare markets.

Insurers and the industry's state-based regulators have both criticized Trump's executive order, panning it as a counterproductive step that could open the door to a new batch of flimsy, poorly regulated health plans. Unlike Obamacare plans, association health plans would be supervised by the federal government instead of individual states.

"It gets into a really problematic situation" if there aren't strict guidelines for association health plans, National Association of Insurance Commissioners CEO Michael Consedine said. "You could have a founding association of Game of Thrones binge-watchers."

Indeed, even some of the strongest proponents of association plans insist that strong guardrails must be placed on what groups can qualify.

"Constraining participation to bonafide trade associations — that's a critical element," said Neil Trautwein, the vice president for health care policy at the National Retail Federation. "I think there is a way that you can weed out the true trade associations from the would-be fly-by-nights."

That's exactly the kind of challenge that federal rule-makers will spend the next several months working out, away from the media spotlight and Trump's predictions of an imminent rush of "staggering competition" on the insurance markets.

And in the meantime, the Obamacare markets will continue on — outside of a new dose of anxiety of what might lie ahead.

"It really all now depends on what Labor and HHS do," Gorman said. "The hope is that this will go the way of the opioid emergency, and he'll do all this for the cameras and nothing will come of it."

Paul Demko contributed to this report.