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 also directed the secretaries of the Treasury, labor and health and human services to find ways of expanding access to short-term limited duration insurance. And the White House said that such insurance is not subject to costly Obamacare mandates and rules.
Short-term policies could be particularly useful to people in counties where only a single insurer is offering plans in the Affordable Care Act marketplace, the White House said.
In 2018, it said, more than 1,500 counties nearly 50 percent of all counties are projected to have only one option on their individual insurance exchanges.
But short-term policies can limit benefits and charge higher premiums to people who have expensive medical conditions, a type of discrimination banned in policies regulated under the Affordable Care Act.
Another part of Mr. Trumps 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.
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 the executive order, the federal government could pre-empt many state insurance rules, a prospect that alarms state insurance commissioners.
Mr. Trumps initiative is supported by business groups that see association health plans as a possible way to provide more affordable health insurance to their members. These include the National Federation of Independent Business, the National Association of Wholesaler-Distributors and the National Restaurant Association.
But consumer groups and the National Association of Insurance Commissioners, representing state officials, have opposed association health plans because they could be largely exempt from state regulation.
Association health plans cherry-pick health groups, making it more difficult for less healthy groups to find affordable coverage, the National Association of Insurance Commissioners told Congress this year.
Some state regulators and insurers greeted the move with alarm and warned that by relaxing standards for association health plans and short-term policies, Mr. Trump would create low-cost insurance options for the healthy, driving up costs for the sick and destabilizing insurance marketplaces created under the Affordable Care Act.
By siphoning off healthy individuals, these junk plans could cannibalize the insurance exchanges, said Topher Spiro, a vice president of the Center for American Progress, a liberal research and advocacy group. For older, sicker people left behind in plans regulated under the Affordable Care Act, premiums could increase.
But to business groups, the executive order offers an opportunity to bind their members together and sell large-group insurance policies that are cheap and attractive. Dirk Van Dongen, the president of the National Association of Wholesaler-Distributors, said that he was delighted with Mr. Trumps initiative and that his group would seriously consider establishing an association health plan.
Small to midsize businesses have very little leverage in the insurance market, Mr. Van Dongen said. Anything that allows them to amalgamate their purchasing power will be helpful.
