Can States Fill the Gap if the Federal Government Overturns Preexisting-Condition Protections?

https://www.commonwealthfund.org/blog/2019/can-states-fill-gap-preexisting-condition-protections

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Once again, the Affordable Care Act (ACA) is under threat, this time in the form of Texas v. Azar, a federal lawsuit challenging its constitutionality. This litigation, now under consideration by the Fifth Circuit Court of Appeals, took an unexpected turn in March when the U.S. Department of Justice (DOJ) sided with the plaintiffs, urging the Court to strike the ACA down in its entirety.

On May 1, the administration filed a brief in support of this action. But even before this suit, DOJ had refused to defend key provisions that guarantee coverage of preexisting conditions. If the courts agree with the DOJ, it would invalidate every provision of the 2010 law.

As many as 20 million people nationwide would lose their coverage, while millions more could face insurance company denials, premium surcharges, or high out-of-pocket costs because of their health status.

ACA Protections for People with Preexisting Conditions

  • Guaranteed issue. Health insurers are prohibited from denying an individual or employer group a policy based on their health status.
  • Community rating. Health insurers may not use an individual or small employer group’s health status to set premiums.
  • Preexisting condition exclusions. Health insurers and employer group plans are prohibited from refusing to cover services needed to treat a preexisting condition.
  • Essential health benefits. Health insurers selling to individuals and small employers must cover a minimum set of 10 “essential” benefits: ambulatory services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services; and pediatric services, including oral and vision care.
  • Cost-sharing protections. Health insurers and employer group plans must cap the amount enrollees pay out-of-pocket for health care services each year.
  • Annual and lifetime limits. Health insurers and employer group plans are prohibited from imposing annual or lifetime dollar limits on essential health benefits.
  • Preventive services. Health insurers and employer group plans are required to cover evidence-based preventive services without any enrollee cost-sharing.
  • Nondiscrimination. Health insurers must implement benefit designs for individuals and small employers that do not discriminate based on age, disability, or expected length of life.

To help blunt potential fallout and prevent adverse effects for millions of individuals, several states are enacting bills to ensure that federal ACA protections become part of state law (see box). However, before the ACA, state efforts to require insurers to cover people with preexisting conditions resulted in large premium spikes and, in some cases, caused insurers to exit the market.

The ACA’s premium subsidies have had a critical stabilizing effect. If those subsidies are invalidated, states will have a hard time restoring them with state dollars. In addition, state regulation of self-funded employer plans is preempted under the federal Employee Retirement Income Security Act (ERISA), meaning the 61 percent of people with this type of job-based coverage can regain their protections under the ACA only if Congress steps in to restore them.

States Are Stepping Up, but Power to Fully Protect Consumers Is Limited

In a previous post, we found that at least four states (Colorado, Massachusetts, New York, and Virginia) had laws that would preserve key ACA preexisting-condition protections if the federal law is overturned. Since that time, seven more states (Connecticut, Hawaii, Indiana, Maine, Maryland,1 New Mexico, and Washington) have acted to preserve the ACA’s protections for their residents.

These bills take different approaches. Maine, New Mexico, and Washington passed comprehensive bills that would preserve all the protections listed above. The Connecticut, Hawaii, and Indiana laws are more narrowly focused. Hawaii and Indiana prohibit insurers from imposing preexisting condition exclusions; Connecticut aligns its benefit standards with the ACA. Maryland took a different approach, creating a workgroup to recommend ways to protect residents if the ACA is struck down. The governors of New Jersey and Rhode Island have issued executive orders directing their state agencies to uphold the ACA’s principles, by guarding against discrimination based on preexisting conditions and strengthening consumer protections to ensure access to affordable coverage.

Looking Forward

The Fifth Circuit Court of Appeals is expected to hear arguments in Texas v. Azar in July. Whatever that court decides, the losing party is likely to ask the Supreme Court to hear the case, and a ruling could come as soon as June 2020. With the future of the ACA hanging in the balance, at least 14 other states are considering legislation codifying some of the federal consumer protections during their 2019 sessions.

 

 

 

Trump administration appeals association health plan ruling

https://www.fiercehealthcare.com/payer/dept-labor-defends-rights-small-businesses-to-expanded-health-plans?mkt_tok=eyJpIjoiTXpCbFpXWXpPR1JtTTJSayIsInQiOiIyUWdwd0NuaU9YSUFYcmg1UnlDUm84Tk4yXC8weWpLOG5hT0lXWHJSRjIzMllDUFZmU05XSFpKWmRrQ3R0NjhPV3VSbk5KTFVYbEdPMXZmMHF1Q0JRbCtRNzZzSWFPV1Y2N1hnMmpRVlNtS1wvNmRZSE1YREZnbUNLM3ZnMXE2ejhBIn0%3D&mrkid=959610

Gavel court room lawsuit judge

The Trump administration will appeal a judge’s ruling that struck down much of its rule expanding association health plans (AHPs).

The rule made it easier for an association of employers to establish an employee welfare plan—regulated under the Employee Retirement Income Security Act (ERISA) and the Affordable Care Act—as a single employer plan. In other words, small employers can work together with others in their industry or geographic area to purchase a larger health plan.

The Department of Labor filed a notice of appeal (PDF) Friday.

Eleven states and the District of Columbia filed a lawsuit saying that the definition of “employer” in ERISA was not reasonable. A federal district court agreed and set aside regulations for qualifying associations, saying that the Labor Department failed to put a limit on the types of associations that can qualify to sponsor an AHP.

“This appeal is welcomed by associations across the country who have invested their time, money and reputation to launch health plans under the 2018 regulation,” Kev Coleman, president and founder of AssociationHealthPlans.com, said in a statement. “This regulation marked a watershed in health policy inasmuch as it corrected a basic unfairness existing in health coverage costs between small companies and large companies.”

Critics, meanwhile, argue the plans offer skimpy coverage that can leave consumers at risk.

Currently, there are an estimated 30,000 small-business employees and their dependents using these plans. According to a 2019 healthcare survey by AssociationHealthPlans.com, four out of five respondents supported small businesses working together to offer large company health insurance plans.

In Congress, Sens. Chuck Grassley, R-Iowa, and Joni Ernst, R-Iowa, joined Sen. Mike Enzi, R-Wyoming, in introducing legislation to prevent small business employees from losing their healthcare coverage. The legislation would ensure a pathway for small businesses to offer AHPs under the Labor Department’s final rule.

 

 

 

 

UPMC fires back at state AG, seeks to join BCBS antitrust lawsuit

https://www.healthcaredive.com/news/upmc-fires-back-at-state-ag-seeks-to-join-bcbs-antitrust-lawsuit/548993/

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University of Pittsburgh Medical Center filed a counter lawsuit on Thursday against the Pennsylvania attorney general, who is seeking to force the healthcare giant into contracting with rival Highmark. The system is also seeking to insert itself in a broader lawsuit over the ways Blues operate.

The flurry of filings taps into big questions over payer competition and underscores tensions seen throughout the country between insurance companies and providers as they negotiate contracts, particularly in highly concentrated markets. States have stepped up their enforcement of consumer protections against rising healthcare costs — but UPMC is saying its regulators have greatly overstepped their bounds. 

Earlier this month, Shapiro alleged Pittsburgh’s dominant medical provider wasn’t living up to its charitable mission as a nonprofit, accusing the health system of “forsaking its charitable obligations” in exchange for “corporate greed.”

The legal duel stems from a contract dispute between UPMC and its rival Highmark. Until June 30, the two have a legal agreement protecting consumer access to the other’s network through a consent decree. UPMC refuses to modify the decree and contract with Highmark, which risks in-network access to UPMC hospitals for Highmark members.

In response to the attorney general’s initial complaint, UPMC alleges that Shapiro’s attempt to renew and modify an expiring agreement between the Pittsburgh health system and Highmark is “unprecedented and unwarranted.”  The modification would, among other things, remove the majority of UPMC’s board of directors and force the integrated system to contract with any payer. 

The state AG responded on Friday, accusing UPMC of ignoring its mission and noting it would not be intimated by the healthcare behemoth.

“With their filings today, UPMC has shown they intend to spend countless hours and untold resources on a legal battle instead of focusing on their stated mission as a non-profit charity — promoting the public interest and providing patient access to affordable health care,” said Attorney General’s Office spokesman Joe Grace.

In its notice to the AG, UPMC lays out five examples it calls frivolous enough to get Shapiro’s motion dismissed — including previous testimony delivered by Deputy Attorney General Jim Donahue in 2014, when he told state representatives there is “no statutory basis” to make the two companies contract with each other without setting a dangerous economic precedent.

“If we force the resolution in this case, we really could not avoid trying to force a similar resolution in all those other situations, and that is simply and unworkable method of dealing with these problems,” Donahue said at the time. “We’d be putting our finger on the scale, so to speak … and we’re not sure what those effects would be.”

One effect is a class action lawsuit, which UPMC filed separately Thursday. It alleges Shapiro has violated at least four federal laws: Medicare Advantage statutes protecting competition, the Affordable Care Act’s nonprofit payer regulations and the Sherman Act and the Employee Retirement Income Security Act of 1974.

“Purporting to act in his official capacity, General Shapiro has illegally taken over nonprofit healthcare in the Commonwealth of Pennsylvania,” UPMC’s class action states. “Without rulemaking, legislation or public comment, General Shapiro has announced new ‘principles’ that radically (and often in direct contravention of existing federal and state law) change how nonprofit health insurers and providers operate, now rendering the Attorney General the arbiter of how nonprofit health organizations should envision and achieve their mission.”

UPMC says Blues system bad for business

Separate from its battle with the state attorney general, UPMC is attempting to jump in the middle of a legal antitrust battle over how Blue Cross Blue Shield plans operate. UPMC is seeking both a preliminary injunction and a motion to intervene in the years-long federal case in Alabama.

UPMC is asking the Alabama court to stop the Blues plans from enforcing their own market allocation agreements that prevent UPMC from contracting with other Blues plans, according to the filing. UPMC says a significant chunk of its patients have a Blue Cross Blue Shield plan from a different provider other than Highmark.

Joe Whatley, co-lead counsel for provider plaintiffs in the Alabama case, told Healthcare Dive UPMC “presents a good example of how the Blues are abusing their illegal agreement for their benefit and to harm healthcare providers throughout the country.”

UPMC argues that it would contract with other Blue Cross Blue Shield plans, separate from Highmark, but cannot due to the way Blues operate — or limit how they compete with one another. BCBS plans tend to stake out their own geographic areas and avoid competition with one another, a practice the Alabama court has already found is in violation of antitrust laws. A BCBS appeal to the Alabama judge’s opinion was already struck down by the 11th U.S. Circuit Court of Appeals late last year.

UPMC is asking the Alabama court for an injunction, or to step in and stop the Blues plans from enforcing or complying with their own market allocation agreements that are preventing UPMC from contracting with other Blues plans, according to the filing. And because the hometown plan, Highmark, does not have a contract with UPMC after June 30, it means that other Blues plan members that have enjoyed in-network access to UPMC will soon lose access after the consent decree expires.

About 24% of UPMC’s hospital patients have a Blue Cross Blue Shield plan other than Highmark.

UPMC contends that it has tried to contract with other Blues but was turned down. “The average non-Highmark Blues patient does not know that UPMC has offered contracts to each of these plans and been turned down because the Blues’ illegal market allocation prevents them entering into such an agreement with UPMC,” according to the filing.

Without an injunction, UPMC alleges it will suffer irreparable harm to its reputation and will lose a significant number of patients who have a non-Highmark Blues plans.

The Pennsylvania attorney general’s office has not responded to Healthcare Dive’s request for comment and UPMC declined to discuss the case further.

 

 

 

 

Federal judge approves Ascension Health’s $29.5M settlement in class-action pension lawsuit

https://www.beckershospitalreview.com/legal-regulatory-issues/federal-judge-approves-ascension-health-s-29-5m-settlement-in-class-action-pension-lawsuit.html

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Ascension Health, a Catholic health system based in St. Louis, will pay $29.5 million to settle a class-action lawsuit alleging the health system and subsidiary Wheaton Franciscan Services in Glendale, Wis., violated the Employee Retirement Income Security Act, which governs employee pensions.

The lawsuit, filed in April 2016, alleged Wheaton erroneously treated its pension plan as a “church plan” exempt from ERISA.

The parties entered a class-action settlement agreement Sept. 1, 2017, and the court preliminarily approved the settlement Sept. 13, 2017. The court gave final approval to the proposed settlement after holding a fairness hearing on Jan. 16.

The parties inked the settlement agreement about three months after the U.S. Supreme Court held church-affiliated hospitals do not have to comply with ERISA.

https://www.beckershospitalreview.com/legal-regulatory-issues/supreme-court-exempts-church-affiliated-hospitals-from-federal-pension-law-5-things-to-know.html

 

Trump healthcare order could run afoul of retirement plan law

http://www.reuters.com/article/us-usa-healthcare-lawsuits-analysis/trump-healthcare-order-could-run-afoul-of-retirement-plan-law-idUSKBN1CH0DR

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President Donald Trump’s plan to make it easier for small businesses to band together and buy stripped-down health insurance plans could violate a federal law governing employee benefit plans and will almost certainly be challenged in court, legal experts said.

U.S. President Donald Trump speaks about tax reform in Harrisburg, Pennsylvania, U.S., October 11, 2017. REUTERS/Joshua Roberts

Trump signed an executive order on Thursday aimed at letting small businesses join nationwide associations for the purpose of buying large-group health plans that are not subject to coverage requirements of the Affordable Care Act, commonly known as Obamacare.

Industry experts said Trump’s order could ultimately enable such associations to purchase insurance from states with the fewest regulations. That would undermine Obamacare, former Democratic President Barack Obama’s signature healthcare law, which Republicans have failed to repeal.

Several healthcare and employment law experts said if Trump’s plan moves forward, states could argue the federal government had overstepped its authority in violation of the U.S. Employee Retirement Income Security Act (ERISA), a law that governs large-group plans.

In Thursday’s order, Trump asked the Department of Labor to propose rules that would allow more employers to participate in association health plans. Legal experts said lawsuits might not be brought until such regulations are issued.

Dania Palanker, an assistant research professor at Georgetown University’s Center on Health Insurance Reforms, said ERISA granted states the right to regulate association health plans.

Attorneys general could argue the federal government had overreached if the Trump administration winds up allowing associations to buy health coverage across borders that only complies with a single state’s regulations.

”Any attempt to allow the sale of association plans to small groups across state lines will be open to legal scrutiny as to whether it is violating ERISA and undermining state authority,” said Palanker.

‘PREPARED TO FIGHT’

A White House official said that “departments will be drafting rules in a way that minimizes litigation risk.”

The Department of Labor “will be reviewing ERISA in the course of following the President’s direction” in the order, the official said.

A number of state attorneys general from Democratic-leaning states said on Thursday they would fight any efforts to weaken Obamacare, which extended health insurance to 20 million Americans, but which Republicans call intrusive and ineffective.

“It should come as no surprise that California is prepared to fight in court to protect affordable healthcare for its people,” said Xavier Becerra, the state’s Democratic attorney general.

Legal experts said states may argue the associations formed for the purpose of buying insurance are not employers under ERISA.

Although ERISA allows associations to qualify as employers and manage large-group plans, federal regulators have generally required that members of such associations have a high degree of common interest beyond buying insurance, said Allison Hoffman, a professor at the University of Pennsylvania School of Law.

Trump’s order asks the secretary of labor, who enforces ERISA, to consider expanding the common-interest requirements to permit broader participation in association health plans.

SHORT-TERM PLANS

The idea of expanding association health plans across state lines has long been championed by Republican U.S. Senator Rand Paul, who made it a key plank of his own proposal to repeal and replace Obamacare. The Kentucky Republican was at Trump’s side when the president signed the executive order.

Paul’s proposal said ERISA was too restrictive in its definition of associations and that the law needed to be amended.

Thursday’s order also asked the Labor, Treasury and Health and Human Services Departments to look into expanding participation in cheaper, bare-bones, short-term limited-duration insurance plans, which are not subject to the ACA.

Timothy Jost, a professor at the Washington and Lee University School of Law, said such a move would face fewer legal hurdles than the expansion of association health plans.

The current three-month limitation on the use of such plans was a rule adopted by the Obama administration last year, so the Trump administration could roll it back through the normal rulemaking process.

Such plans are typically marketed to individuals who are between jobs or have a gap in coverage. They are much cheaper than ACA plans, but cover less and can exclude those with pre-existing conditions.

Trump healthcare order could run afoul of retirement plan law

https://www.reuters.com/article/us-usa-healthcare-lawsuits-analysis/trump-healthcare-order-could-run-afoul-of-retirement-plan-law-idUSKBN1CH0DR

Image result for ERISA

President Donald Trump’s plan to make it easier for small businesses to band together and buy stripped-down health insurance plans could violate a federal law governing employee benefit plans and will almost certainly be challenged in court, legal experts said.

Trump signed an executive order on Thursday aimed at letting small businesses join nationwide associations for the purpose of buying large-group health plans that are not subject to coverage requirements of the Affordable Care Act, commonly known as Obamacare.

Industry experts said Trump’s order could ultimately enable such associations to purchase insurance from states with the fewest regulations. That would undermine Obamacare, former Democratic President Barack Obama’s signature healthcare law, which Republicans have failed to repeal.

Several healthcare and employment law experts said if Trump’s plan moves forward, states could argue the federal government had overstepped its authority in violation of the U.S. Employee Retirement Income Security Act (ERISA), a law that governs large-group plans.

In Thursday’s order, Trump asked the Department of Labor to propose rules that would allow more employers to participate in association health plans. Legal experts said lawsuits might not be brought until such regulations are issued.

Dania Palanker, an assistant research professor at Georgetown University’s Center on Health Insurance Reforms, said ERISA granted states the right to regulate association health plans.

Attorneys general could argue the federal government had overreached if the Trump administration winds up allowing associations to buy health coverage across borders that only complies with a single state’s regulations.

”Any attempt to allow the sale of association plans to small groups across state lines will be open to legal scrutiny as to whether it is violating ERISA and undermining state authority,” said Palanker.

‘PREPARED TO FIGHT’

A White House official said that “departments will be drafting rules in a way that minimizes litigation risk.”

The Department of Labor “will be reviewing ERISA in the course of following the President’s direction” in the order, the official said.

A number of state attorneys general from Democratic-leaning states said on Thursday they would fight any efforts to weaken Obamacare, which extended health insurance to 20 million Americans, but which Republicans call intrusive and ineffective.

“It should come as no surprise that California is prepared to fight in court to protect affordable healthcare for its people,” said Xavier Becerra, the state’s Democratic attorney general.

Legal experts said states may argue the associations formed for the purpose of buying insurance are not employers under ERISA.

Although ERISA allows associations to qualify as employers and manage large-group plans, federal regulators have generally required that members of such associations have a high degree of common interest beyond buying insurance, said Allison Hoffman, a professor at the University of Pennsylvania School of Law.

Trump’s order asks the secretary of labor, who enforces ERISA, to consider expanding the common-interest requirements to permit broader participation in association health plans.

SHORT-TERM PLANS

The idea of expanding association health plans across state lines has long been championed by Republican U.S. Senator Rand Paul, who made it a key plank of his own proposal to repeal and replace Obamacare. The Kentucky Republican was at Trump’s side when the president signed the executive order.

Paul’s proposal said ERISA was too restrictive in its definition of associations and that the law needed to be amended.

Thursday’s order also asked the Labor, Treasury and Health and Human Services Departments to look into expanding participation in cheaper, bare-bones, short-term limited-duration insurance plans, which are not subject to the ACA.

Timothy Jost, a professor at the Washington and Lee University School of Law, said such a move would face fewer legal hurdles than the expansion of association health plans.

The current three-month limitation on the use of such plans was a rule adopted by the Obama administration last year, so the Trump administration could roll it back through the normal rulemaking process.

Such plans are typically marketed to individuals who are between jobs or have a gap in coverage. They are much cheaper than ACA plans, but cover less and can exclude those with pre-existing conditions.

Trump to Scrap Critical Health Care Subsidies, Hitting Obamacare Again

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 President Trump will scrap subsidies to health insurance companies that help pay out-of-pocket costs of low-income people, the White House said late Thursday. His plans were disclosed hours after the president ordered potentially sweeping changes in the nation’s insurance system, including sales of cheaper policies with fewer benefits and fewer protections for consumers.

The twin hits to the Affordable Care Act could unravel President Barack Obama’s signature domestic achievement, sending insurance premiums soaring and insurance companies fleeing from the health law’s online marketplaces. After Republicans failed to repeal the health law in Congress, Mr. Trump appears determined to dismantle it on his own.

Without the subsidies, insurance markets could quickly unravel. Insurers have said they will need much higher premiums and may pull out of the insurance exchanges created under the Affordable Care Act if the subsidies were cut off. Known as cost-sharing reduction payments, the subsidies were expected to total $9 billion in the coming year and nearly $100 billion in the coming decade.

“The government cannot lawfully make the cost-sharing reduction payments,” the White House said in a statement.

It concluded that “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”

In a joint statement, the top Democrats in Congress, Senator Chuck Schumer of New York and Representative Nancy Pelosi of California, said Mr. Trump had “apparently decided to punish the American people for his inability to improve our health care system.”

“It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” they said. “Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.”

Lawmakers from both parties have urged the president to continue the payments. Mr. Trump had raised the possibility of eliminating the subsidies at a White House meeting with Republican senators several months ago. At the time, one senator told him that the Republican Party would effectively “own health care” as a political issue if the president did so.

“Cutting health care subsidies will mean more uninsured in my district,” Representative Ileana Ros-Lehtinen, Republican of Florida, wrote on Twitter late Thursday. She added that Mr. Trump “promised more access, affordable coverage. This does opposite.”

But Speaker Paul D. Ryan, Republican of Wisconsin, praised Mr. Trump’s decision and said the Obama administration had usurped the authority of Congress by paying the subsidies. “Under our Constitution,” Mr. Ryan said, “the power of the purse belongs to Congress, not the executive branch.”

The future of the payments has been in doubt because of a lawsuit filed in 2014 by House Republicans, who said the Obama administration was paying the subsidies illegally. Judge Rosemary M. Collyer of the United States District Court in Washington agreed, finding that Congress had never appropriated money for the cost-sharing subsidies.

The Obama administration appealed the ruling. The Trump administration has continued the payments from month to month, even though Mr. Trump has made clear that he detests the payments and sees them as a bailout for insurance companies.

This summer, a group of states, including New York and California, was allowed to intervene in the court case over the subsidies. The New York attorney general, Eric T. Schneiderman, said on Thursday night that the coalition of states “stands ready to sue” if Mr. Trump cut off the subsidies.

What the administration has done to weaken the health law.

Mr. Trump’s decision to stop the subsidy payments puts pressure on Congress to provide money for them in a spending bill.

Senator Lamar Alexander, Republican of Tennessee and the chairman of the Senate health committee, and Senator Patty Murray of Washington, the senior Democrat on the panel, have been trying to work out a bipartisan deal that would continue the subsidy payments while making it easier for states to obtain waivers from some requirements of the Affordable Care Act. White House officials have sent mixed signals about whether Mr. Trump was open to such a deal.

The decision to end subsidies came on the heels of Mr. Trump’s executive order, which he signed earlier Thursday.

With an 1,100-word directive to federal agencies, the president laid the groundwork for an expanding array of health insurance products, mainly less comprehensive plans offered through associations of small employers and greater use of short-term medical coverage.

It was the first time since efforts to repeal the landmark health law collapsed in Congress that Mr. Trump has set forth his vision of how to remake the nation’s health care system using the powers of the executive branch. It immediately touched off a debate over whether the move would fatally destabilize the Affordable Care Act marketplaces or add welcome options to consumers complaining of high premiums and not enough choice.

Most of the changes will not occur until federal agencies write and adopt regulations implementing them. The process, which includes a period for public comments, could take months. That means the order will probably not affect insurance coverage next year, but could lead to major changes in 2019.

“With these actions,” Mr. Trump said at a White House ceremony, “we are moving toward lower costs and more options in the health care market, and taking crucial steps toward saving the American people from the nightmare of Obamacare.”

“This is going to be something that millions and millions of people will be signing up for,” the president predicted, “and they’re going to be very happy.”

But many patients, doctors, hospital executives and state insurance regulators were not so happy. They said the changes envisioned by Mr. Trump could raise costs for sick people, increase sales of bare-bones insurance and add uncertainty to wobbly health insurance markets.

Chris Hansen, the president of the lobbying arm of the American Cancer Society, said the order “could leave millions of cancer patients and survivors unable to access meaningful coverage.”

In a statement from six physician groups, including the American Academy of Family Physicians, the doctors predicted that “allowing insurers to sell narrow, low-cost health plans likely will cause significant economic harm to women and older, sicker Americans who stand to face higher-cost and fewer insurance options.”

While many health insurers remained silent about the executive order, some voiced concern that it could destabilize the market. The Trump proposal “would draw younger and healthier people away from the exchanges and drive additional plans out of the market,” warned Ceci Connolly, the chief executive of the Alliance of Community Health Plans.

Administration officials said they had not yet decided which federal and state rules would apply to the new products. Without changing the law, they said, they can rewrite federal regulations so that more health plans would be exempt from some of its requirements.

The Affordable Care Act has expanded private insurance to millions of people through the creation of marketplaces, also known as exchanges, where people can purchase plans, in many cases using government subsidies to offset the cost. It also required that plans offered on the exchanges include a specific set of benefits, including hospital care, maternity care and mental health services, and it prohibited insurers from denying coverage to people with pre-existing medical conditions.

The executive order’s quickest effect on the marketplaces would be the potential expansion of short-term plans, which are exempt from Affordable Care Act requirements. Many health policy experts worry that if large numbers of healthy people move into such plans, it would drive up premiums for those left in Affordable Care Act plans because the risk pool would have sicker people.

“If the short-term plans are able to siphon off the healthiest people, then the more highly regulated marketplaces may not be sustainable,” said Larry Levitt, a senior vice president for the Kaiser Family Foundation. “These plans follow no rules.”

Mr. Trump’s order would also eventually make it easier for small businesses to band together and buy insurance through entities known as association health plans, which could be created by business and professional groups. A White House official said these health plans “could potentially allow American employers to form groups across state lines” — a goal championed by Mr. Trump and many other Republicans — allowing more options and the formation of larger risk pools.

Association plans have a troubled history. Because the plans were not subject to state regulations that required insurers to have adequate financial resources, some became insolvent, leaving people with unpaid medical bills. Some insurers were accused of fraud, telling customers that the plans were more comprehensive than they were and leaving them uncovered when consumers became seriously ill.

The White House said that a broader interpretation of federal law — the Employee Retirement Income Security Act of 1974 — “could potentially allow employers in the same line of business anywhere in the country to join together to offer health care coverage to their employees.”

The order won applause from potential sponsors of association health plans, including the National Federation of Independent Business, the National Restaurant Association, the U.S. Chamber of Commerce and Associated Builders and Contractors, a trade group for the construction industry.

The White House released a document saying that some consumer protections would remain in place for association plans. “Employers participating in an association health plan cannot exclude any employee from joining the plan and cannot develop premiums based on health conditions” of individual employees, according to the document. But state officials pointed out that an association health plan can set different rates for different employers, so that a company with older, sicker workers might have to pay much more than a firm with young, healthy employees.

“Two employers in an association can be charged very different rates, based on the medical claims filed by their employees,” said Mike Kreidler, the state insurance commissioner in Washington.

Mr. Trump’s order followed the pattern of previous policy shifts that originated with similar directives to agencies to come up with new rules.

Within hours of his inauguration in January, he ordered federal agencies to find ways to waive or defer provisions of the Affordable Care Act that might burden consumers, insurers or health care providers. In May, he directed officials to help employers with religious objections to the federal mandate for insurance coverage of contraception.

Both of those orders were followed up with specific, substantive regulations that rolled back Mr. Obama’s policies.

In battles over the Affordable Care Act this year, Mr. Trump and Senate Republicans said they wanted to give state officials vast new power to regulate insurance because state officials were wiser than federal officials and better understood local needs. But under Thursday’s order, the federal government could pre-empt many state insurance rules, a prospect that alarms state insurance regulators.

Another part of Mr. Trump’s order indicates that he may wish to crack down on the consolidation of doctors, hospitals and other health care providers, a trend that critics say has driven up costs for consumers. Mr. Trump said that administration officials, working with the Federal Trade Commission, should report to him within 180 days on federal and state policies that limit competition and choice in the health care industry.