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Thursday, January 26, 2017

Trump’s Obamacare Executive Order: Much Ado About Very Little

Ron Pollack

Executive Director

Originally published as a guest post at Health Affairs Blog.

On Inauguration Day, newly sworn-in President Donald Trump signed an Affordable Care Act (ACA) executive order that the new Administration heralded as a major development. In a Washington Post page 1 story, the headline read “Signed Order Might Start the Gutting of ACA Mandate.” The story’s headline in The New York Times said “Trump Issues Executive Order to Scale Back Part of Health Care Law,” and a jump-site for the story indicated “A President’s One-Page Directive Could Have a Wide-Ranging Impact.”

Despite the Administration’s hype and the headline hullabaloo about the executive order, that order constitutes much ado about very little. Indeed, the executive order is vacuous. Thankfully, the seasoned, thoughtful Post and Times reporters who wrote the stories offered a much more nuanced and contextualized description about the President’s order than the headlines suggest. And, as Vox’s Sarah Kliff aptly characterized it in a tweet, the executive order is “akin to a political scream, but a policy whisper.”

Reading The Executive Order Closely

Certainly Trump’s first-day ACA-related “action” confirms that the historic law remains a top-priority bulls-eye for the President. More significantly, however, the executive order’s lack of meaningful content confirms that the White House and congressional Republicans remain totally confused and unclear about their proposed directions for America’s health care system.

As the order’s heading states, its intended purpose is to “minimiz[e] the economic burden” of the ACA “pending repeal.” It tells the Secretary of Health and Human Services (HHS) and other federal officials that, to “the maximum extent permitted by law,” they should “waive, defer, grant exemptions from, or delay” implementation of the law so it doesn’t “burden” individuals, families, states, health care providers, and insurers.

The key operative term, of course, is the portion italicized above. Moreover, the order goes on to say that “heads of agencies shall comply with the Administrative Procedure Act and other applicable statutes in considering or promulgating” ACA-related revisions. In other words, the executive order neither countermands any portions of the historic statute nor vitiates any of the regulations duly promulgated by the Obama Administration’s HHS and other departments.

The Order Changes Very Little

So what substantive effect should be ascribed to the executive order other than its political restatement that the new Administration will “seek the prompt repeal” of the ACA? First, contrary to the Post’s headline, the order does not, in any way, modify the historic statute’s individual mandate. This can only be changed by an act of Congress. Since the Supreme Court in National Federation of Independent Business v. Sebelius (the first major legal challenge to the ACA) made clear that the individual mandate is central to the operation of the ACA, it would be a tall order for the Trump Administration to eliminate or water it down without explicit congressional approval. It is possible that Administration officials will seek to grant individualized hardship exemptions from the mandate, but this is rather insignificant.

Second, the executive order does not eliminate or modify the tax-credit premium subsidies that are crucial to making premiums affordable in the private marketplace. The order also does not authorize the new Administration to eliminate the Medicaid expansion now helping many millions of people in 31 states, including numerous states with Republican governors. Modification of either of these crucial provisions will require new legislation.

Third, the executive order does not change key rules imposed on insurers. They will still be prohibited from discriminating against people with pre-existing health conditions. They will not be able to impose annual or lifetime caps on how much they pay out to people experiencing major illnesses or accidents. They remain unable to charge higher premiums to women and will be restricted in how much extra they can charge older people. And young adults under 26 years of age will still be able to obtain insurance through their parents.

Fourth, and perhaps most importantly, the executive order does appear to function as an exhortation that Administration officials should grant (so-called “1332” and “1115”) waivers to states seeking to modify the operation of their marketplaces and Medicaid. However, the granting of such waivers is circumscribed by key provisions in the statute, and the exhortation doesn’t add anything to HHS Secretary-designate Price’s existing inclination to issue numerous state waivers.

The net result, therefore, is that the new executive order is unlikely to change anything significant about the ACA. But, since it is devoid of meaningful substance, it underscores how irresponsible Republicans continue to be by maintaining their ongoing commitment to repeal the ACA even though they do not have a clear vision about what should replace it.