Businesses and possibly individuals could purchase insurance excluded from Affordable Care Act coverage mandates

President Donald Trump signs executive order on association health plans.

President Donald Trump signed an executive order Thursday potentially expanding the ability of businesses and individuals to purchase health insurance across state lines through association health plans.

The administration did not immediately release the text of the order, but in a signing ceremony at the White House the president said he was making the move to begin unraveling "the disaster of Obamacare" after Congress's failure to replace and repeal the Affordable Care Act.

"This (order) will cost the government virtually nothing and people will have great, great health care," Trump said.

The order directs the Secretary of Labor to explore expanding access to association health plans that would be exempt from several ACA coverage mandates and rules, according to a White House statement. The order also directs federal agencies to consider expanding the use of short-term limited-duration insurance and health reimbursement arrangements.

Association health plans are popular with some associations and conservative lawmakers. National Restaurant Association CEO Dawn Sweeney—who attended the signing ceremony—said in a statement that association health plans are "critical tool that will significantly expand affordable, employer-sponsored health insurance."

"By allowing small businesses and individuals to join together to access health insurance through their association memberships, President Trump's executive order provides more opportunity for Americans to purchase affordable health care coverage for themselves and their families," she said.

The National Retail Federation is another longtime supporter of expanding association health plans, which the group says would allow small businesses to buy more health insurance for their workers.

"We welcome the administration's move because associations can bring necessary competition to underserved insurance markets," NRF Vice President for Health Care Policy Neil Trautwein said in a statement.

Still, association health plans have many critics who fear they would drive up insurance costs for older and sicker individuals by diverting younger workers into cheaper insurance plans offering bare bones coverage. Critics also say allowing the purchase of insurance across state lines erode consumer protections many states currently have in place.

The National Association of Insurance Commissioners "has long expressed concerns with expanding AHPs in a manner that reduces consumer protections or solvency requirements that promote safe and sound markets," NAIC President Ted Nickel said in a statement. "We also have concerns about the impact of such a proposal on already fragile markets."