Rand Paul: I'm pretty stoked over an upcoming unconstitutional exercise of executive power

“The first executive order that I would issue,” Senator Rand Paul (R-KY) told Breitbart News three years ago, “would be to repeal all previous executive orders.” The prospective presidential candidate explained that executive actions such as signing statements and “altering legislation by the president are wrong and unconstitutional and shouldn’t happen. Executive orders shouldn’t either.”


Of course, that was when Barack Obama had the pen and the phone that offended the outspoken libertarian. What a difference an R makes, eh? Perhaps this flip-flop might best be expressed by the movie title Dr. Strangepaul, or How I Learned to Stop Worrying and Love the Executive Order.

We’re getting an executive order — isn’t that awesome? Hey, the details are coming “soon.” What could go wrong?

This isn’t entirely new. Paul raised this possibility two weeks ago, telling MSNBC that Trump could use the pen-and-phone approach to remake ObamaCare. Paul wanted Trump to remove obstacles to interstate insurance sales and private-group formation:

Paul said on MSNBC that he thinks Trump would move to reinterpret an existing law in order to make it easier for people to buy health insurance across state lines. That’s a goal Republicans have had after since the passage of Obamacare in 2010.

“I think there’s going to be big news from the White House in the next week or two, something they can do on their own,” Paul said. “This is something I’ve been advocating for six months.”

“I believe that President Trump can legalize on his own the ability of individuals to join a group or a health association across state lines and buy insurance,” he added.


In other words, Paul now argues that Trump can create a legislative impact through executive orders. Isn’t that akin to “altering legislation”? Did we amend the Constitution in the last three years in a way that makes this kosher in Paul’s eyes?

The problem with this as an overall solution is that it doesn’t actually change as much as its proponents think, and what it does change may not be as beneficial or as libertarian in its outcome as predicted. Insurance companies can largely do this already, but have to comply with each state’s laws on policy coverages. The Trump-Paul EO would have the unintended consequence of federalizing such sales:

State insurance departments are the watchdogs over insurers that sell policies to small businesses and individuals. They make sure people aren’t cheated, enforce state coverage laws, make certain insurers offer a complete network of providers, and don’t avoid sicker or higher-risk people. Large, self-funded plans are generally exempt from these state laws.

Insurance companies have always been allowed to sell their policies in different states — they just need to comply with each state’s laws. The president’s proposal would short-circuit this oversight so that only the state where the company lives would have jurisdiction.

That’s the key issue. Patients would be forced to appeal to a distant state or a federal agency when they have coverage issues. Companies that play by the local state’s rules — especially states with additional coverage requirements — would be at a competitive disadvantage.


The ability to form associations for the benefit of collective bargaining with insurers also already exists in ObamaCare — but those plans have to comply with the mandates within the ACA, as do all other plans. The only change possible through an executive order would be to eliminate that requirement. If the new EO allows insurance companies to avoid the federal coverage mandates as well as the state regulations, it could accelerate the death spiral for individual coverage:

Association Health Plans already exist, but Trump’s order could allow them to expand and get around ObamaCare rules, creating plans that are only for healthy people. …

Trump’s order, expected as soon as this week, would allow small businesses or other groups of people to band together to buy health insurance. Some fear that these Association Health Plans (AHPs) would not be subject to the same rules as ObamaCare plans, including those that protect people with pre-existing conditions.

That would make these plans cheaper for healthy people, potentially luring them away from the ObamaCare market. The result could be that only sicker, costlier people remain in ObamaCare plans, leading to a spike in premiums.

The NFIB backs this idea, however, and argues that the risk is minimal:

The National Federation of Independent Businesses (NFIB), which has long opposed ObamaCare, supports expanding Association Health Plans and has been advocating for action.

“Allowing people more affordable arrangements is not a bad thing,” said Kevin Kuhlman, director of government relations at the NFIB. He said fears about undermining ObamaCare markets are “overblown.” His group is waiting to review the details of the order, which he said he expects to be issued on Thursday.


Since the whole mess will crash one way or the other, it may not make much difference in practical terms. If the EO accelerates the process, though, Trump and Republicans will end up shouldering the political blame for it. But at least we will have created the Libertarian Moment of Total Executive Authority, so we’ll have a great legacy to recall in our dotage.

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