There’s Less to Trump’s Obamacare Executive Order Than Some Suggest

There’s Less to Trump’s Obamacare Executive Order Than Some Suggest

REUTERS/Jonathan Ernst

For all of the controversy and anxiety it stirred up over the weekend, there is still considerable uncertainty over the practical impact of the executive order newly inaugurated President Donald Trump signed Friday night instructing federal agencies to use any methods allowed by law to dismantle key elements of the Affordable Care Act.

Trump made good on his campaign pledge to take action his first day in office to begin the unprecedented task of wholly repealing and replacing a major modern-era health care program by signing the order. His executive order reaffirmed his intention to seek “prompt repeal” of former President Barack Obama’s signature health insurance program which covers more than 20 million Americans.

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The House and Senate last week approved a budget resolution under special reconciliation rules as the first important step towards dismantling Obamacare and replacing it with a GOP plan. Trump’s executive order is designed to try to speed up Obamacare’s demise from within the executive branch.

The order instructs federal agencies – including the Department of Health and Human Services and the Internal Revenue Service -- to “exercise all authority and discretion available to them” to waive, defer or delay any provision of the law that imposes fiscal hardship on individuals, families, insurers or the health care industry.

The goal is to hasten the demise of a four-year-old subsidized health care program that has been plagued by soaring premiums and co-payments, the collapse of more than 20 experimental co-ops, and major financial losses by UnitedHealthcare, Aetna, Blue Cross-Blue Shield and other that have driven out of some markets. Yet, Obamacare enrollment for the 2017 season is setting records and the nationwide rate of uninsured has dipped below 10 percent – its lowest point ever.

Sign ups don’t always translate into premium payments, of course, and the lowered insurance rate can be credited equally to the ACA’s expanded Medicaid option and the health care exchanges.  

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 While Trump’s executive order doesn’t specify actions that might be taken, the news media and others have speculated that they could include granting states and insurance companies much wider latitude in setting minimum standards for drug and medical treatment provided and creating a freer and more open market. The Washington Post speculated that the order could end up unwinding regulations that include enforcement of the penalty for people who fail to carry health care insurance.

Kellyanne Conway, a counselor to Trump, said on Sunday that the new administration may stop enforcing the mandate requiring most Americans to carry health insurance even before Congress repeals Obamacare –- but without explaining how that would be accomplished.

“What President Trump is doing is, he wants to get rid of that Obamacare penalty almost immediately, because that is something that is really strangling a lot of Americans, to have to pay a penalty for not buying government-run health insurance,” she said on ABC News’ This Week.

However, while the one-page executive order exhorts federal agencies to “take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act to the maximum extent permitted by law,” some healthcare experts say the new administration edict would have far less authority to weaken Obamacare than many assume.

“I think Trump has done what he promised his voters he would do, which is to put out an executive order on the first day in office, beginning the process of rolling back the Affordable Care Act” Tim Jost, a law professor at Washington and Lee College and an expert on health care, said in an interview. “So I don’t know that we’re going to see a lot more out of him in the coming weeks.”

Jost said that there are limits to what Trump and his agency heads can do on the administrative front without going through a long and tortured federal rule-making process. He told in a separate interview, “I think he’s been advised that he can’t repeal the Affordable Care Act through executive action, and now we see where this goes.”

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Indeed, many of the provisions that Trump and his GOP allies are determined to root out – especially premium subsidies for lower-income Americans, mandates, and taxes on insurers and businesses and financial penalties for individuals who fail to purchase coverage – are embedded in law and can only be changed by congressional action.

The individual mandate, which requires uninsured Americas to purchase coverage under the threat of penalty on their federal tax returns, is essential to forcing younger, healthier people to join the pool of beneficiaries and help offset the cost of coverage for older, sicker people. Without the mandate, insurers couldn’t make a profit.

But that mandate has not panned out. After doing the math, many younger Americans have opted to pay the penalty rather than sign up for Obamacare and expensive premiums, which they cannot afford. So they’re taking their chances that they remain healthy and avoid serious accidents.

While the Obama administration often granted hardship waivers to people facing penalties, experts say it is highly unlikely the Trump administration could greatly expand the waivers without congressional authorization.

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Joseph Antos, a health care scholar at the conservative-leaning American Enterprise Institute, said Trump’s executive order “is more of an admonition and political statement than an instruction to act.” He predicted that little will happen internally until Trump gets his health care team in place – and that may not be for a while.

Rep. Tom Price (R-GA), Trump’s nominee for secretary of health and human services, has run into tough opposition from the Democrats during his Senate confirmation process because of allegations he repeatedly engaged in insider stock trading as a member of the House Ways and Means Committee. Those hearings could drag on until the middle of February or longer. Without Price and Seema Verma, Trump’s choice to head the HHS’s Centers for Medicare and Medicaid Services, in place, there is relatively little the new administration can do to alter Obamacare. 

“Any concrete action will require leadership from the Secretary of HHS,” Antos said in an email. “Acting officials are careerists who generally won’t get out ahead of the politics. Tom Price would have some ideas about what could be slowed down or not pursued, but he won’t be Secretary very soon.

Larry Levitt, a vice president of the Kaiser Family Foundation and an expert on Obamacare, said in an email, “The [Trump] order doesn’t by itself do anything, but it signals the direction the Trump Administration intends to go in.”

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Levitt noted that the Obama Administration delayed the enforcement of a number of rules and penalties, including a mandate for businesses to provide health insurance to their employees, so there certainly is precedent for the Trump administration to come up with other waivers and exceptions.

Yet unless Trump and the Republicans are willing to risk the complete collapse of the individual insurance market before they can agree on a suitable replacement, they will have to be careful not to spook insurers too much – especially after the release of Trump’s executive order on Friday night.

“One thing for sure is that this order creates significant uncertainty for insurers just as they are deciding whether to participate in the individual market for 2018 and how much to increase premiums,” Levitt said.