Chip Somodevilla/Getty Images Gary Cohn
- JPMorgan, Berkshire Hathaway, and Amazon announced a joint venture Tuesday in an attempt to bring down healthcare costs.
- White House economic adviser Gary Cohn said the new venture was "the exact same thing" as an executive order signed by President Donald Trump in October, which allowed expanded access to association health plans.
- There are some key differences between Trump's order and the new Amazon-JPMorgan-Berkshire venture.
An unexpected announcement Tuesday from JPMorgan, Berkshire Hathaway, and Amazon on a healthcare venture sending shockwaves through the market. Top White House adviser Gary Cohn said he has already seen it before.
Cohn, the National Economic Council director and President Donald Trump's top economic advisor, said the new mega-venture seems to be similar to an executive order Trump signed in October.
"We're doing the same thing here at the White House," Cohn told CNBC. "If you look what we did earlier last year, we created association healthcare plans, which is the exact same thing that those three companies did."
Cohn is referring to an executive order that allows for the expanded use of association health plans (AHPs). The plans allow pools of workers, mostly from small businesses, to join together to access the group healthcare market -rather than going through the individual insurance exchanges.
They also allow the workers and small businesses to go around the Affordable Care Act exchanges and access plans that may not do not meet certain ACA requirements.
"We created associated healthcare plans where small businesses could pool their employees together to get more purchasing power so they could save money on healthcare," Cohn said.
The administration rolled out the new AHP rules on January 4.
However, there are a few key differences between the JPMorgan-Berkshire-Amazon announcement (though it remains vague) and the AHP order.
For one, the companies the new venture will initially focus on technology, rather than employee insurance coverage.
"The three companies, which bring their scale and complementary expertise to this long-term effort, will pursue this objective through an independent company that is free from profit-making incentives and constraints," the trio of companies said in a press release. "The initial focus of the new company will be on technology solutions that will provide US employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost."
The new combined venture also appears to be a separate not-for-profit entity, whereas AHPs use outside insurance firms that may be or may not be nonprofits.
And while both initiatives are attempting to leverage a larger pool of employees to help bring down costs, the AHP order is targeted at small businesses and self-employed persons - while the three companies in the announcement on Tuesday have a combined 1.1 million employees globally.