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Trump’s order sends an important signal about what he wants health insurance to look like. Photo: Evan Vucci / AP

President Trump left little doubt yesterday that he intends to do as much damage as he can to the Affordable Care Act's insurance markets. And he can do a lot.

The bottom line: The executive order Trump signed yesterday aims to undercut some of the ACA's core ideas about how insurance markets should work. His decision to halt the law's cost-sharing subsidies will blow up those markets in the short term. And his administration has taken a slew of other steps to undermine enrollment. There's one constant here — to wound the ACA as badly as possible.

The impact: Here's what will happen once the insurer subsidies are cut off:

  • Insurers have already locked in their premiums for next year. Many them will try to find some way to go back and tack on a premium major increase or, if they can't do that, to pull out of some markets entirely.
  • This will create even more pressure on Congress to guarantee funding for the subsidies, as part of a newly urgent bipartisan ACA fix. Having a fresh health care crisis on the front burner can't be good for tax reform, and getting an agreement on the ACA won't be easy.
  • If Congress doesn't act quickly, there's a decent chance insurers will sue the administration. They're still legally obligated to reduce their customers' out-of-pocket spending, and the law says they're supposed to be compensated for that.
  • The Democratic attorneys general of California and New York are already threatening to sue, too.

The fix: Congress can solve this. University of Michigan law professor Nicholas Bagley, an expert on this issue, told me that if Congress appropriates the money for these subsidies, they would begin flowing again immediately. The problem is, Republicans aren't in the mood to do that without some big concessions from Democrats — and the Senate bipartisan talks aren't anywhere close to a deal.

The executive order: It's short. It's vague. It leaves critical questions unanswered. But it does tell us where this administration wants to take the health care system — what it wants insurance, and insurance markets, to look like. It tells us Trump will at least try to get there on his own. And that alone tell us a lot.

Be smart: Insurance can cover a lot and cost a lot, or cover less and cost less. The ACA said insurance should be reasonably comprehensive and accessible to people who need it, even if that meant healthier people had to pay more. That foundational view of insurance is what Trump's order would attempt to reverse.

The ACA sought to flatten out the disparate experiences of the healthy and the sick. Trump would begin to resegregate them.

How it works: Association health plans — letting small businesses pool together to buy insurance coverage as if they were one large business — got most of the attention in the lead-up to yesterday's announcement. But, depending on how all this is actually implemented, the order's other provisions might pose a greater threat to the ACA's core principles.

  • "AHPs, I do not believe are going to sell junk insurance," said Chris Condeluci, an attorney and policy consultant who worked on the Republican side of the Senate Finance Committee during the ACA debate.
  • Association health plans are regulated a lot like the health plans offered by larger employers. Some of the ACA's consumer protections still apply: the plans cannot impose annual or lifetime caps on benefits, for example. They also can't charge one person in the association a higher premium because of a pre-existing condition.
  • The bigger threat to the ACA's framework might come from expanded access to short-term insurance plans, which are subject to hardly any benefit mandates and provide few coverage guarantees.

Go deeper

Biden plans to ask public to wear masks for first 100 days in office

Joe Biden. Photo: Mark Makela/Gettu Images

President-elect Joe Biden and Vice President-elect Kamala Harris sat down with CNN on Thursday for their first joint interview since the election.

The big picture: In the hour-long segment, the twosome laid out plans for responding to the pandemic, jump-starting the economy and managing the transition of power, among other priorities.

The quick FCC fix that would get more students online

Illustration: Sarah Grillo/Axios

As the pandemic forces students out of school, broadband deployment programs aren't going to move fast enough to help families in immediate need of better internet access. But Democrats at the Federal Communications Commission say the incoming Biden administration could put a dent in that digital divide with one fast policy change.

State of play: An existing FCC program known as E-rate provides up to $4 billion for broadband at schools, but Republican FCC chairman Ajit Pai has resisted modifying the program during the pandemic to provide help connecting students at home.

Dion Rabouin, author of Markets
40 mins ago - Politics & Policy

America's hidden depression

Biden introduces his pick for Treasury secretary, Janet Yellen, on Dec. 1. Photo: Alex Wong/Getty Images

President-elect Biden faces a fragile recovery that could easily fall apart, as the economy remains in worse shape than most people think.

Why it matters: There is a recovery happening. But it's helping some people immensely and others not at all. And it's that second part that poses a massive risk to the Biden-Harris administration's chance of success.