On January 20, 2017, Donald Trump was sworn in as President of the United States. True to his word, on his first day in office he issued an executive order addressing the Affordable Care Act. It may not be, however, all that his supporters expected.
On the foreign policy side, where the President’s authority is very broad, executive orders can address the minutiae of relationships with particular countries. On the domestic side, however, where the president’s power is subject to more constraints, executive orders are used for setting broad policy directions. They cannot be used to change laws or regulations, and are not appropriate for establishing detailed guidance addressing specific issues.
Not surprisingly, therefore, President Trump’s Executive Order sets a broad policy direction with respect to the ACA. After reciting the administration’s commitment to seek the repeal of the ACA, it directs the Department of Health and Human Services and other agencies involved in administering the ACA “to the maximum extent permitted by law” to:
exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications;provide greater flexibility to States and cooperate with them in implementing healthcare programs; andencourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.The order reminds the departments and agencies—as well as his supporters who might want more immediate action—that “to the extent that carrying out the directives in this order would require revision of regulations issued through notice-and-comment rulemaking,” which would generally be the case, they must comply with the Administrative Procedures Act and other applicable statutes.
It also notes the Executive Order does not affect the authority of the executive departments and agencies or the role of the Office of Management and Budget (which plays a major role in rulemaking), and is subject to appropriations. Finally, it states:
This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.In sum, nothing happens yet, nor is it likely to happen until the heads of HHS, Treasury, and probably Labor, as well as the CMS Administration and IRS Commissioner are in place; even then it will take a while for changes to be put into motion. In the long run a great deal may change, but we have known that since election night.
But change will only be “to the maximum extent permitted by law.” There may be, for example, a fairly dramatic shift in the interpretation of section 1332 of the ACA, which permits HHS to grant innovation waivers to states, but waivers will still have to be granted subject to section 1332’s requirements. Sale of insurance across state lines is already permitted by the ACA, but subject to state approval and consumer protections that will have to be observed. New categories of hardship exemptions to the individual responsibility requirement may be created, but they will have to qualify as hardships. Section 1115 Medicaid waivers will be granted more liberally, but that was expected, and until they are changed, section 1115 waiver regulations promulgated by the Obama administration will continue to apply.
A number of commenters have noted that the Order seems to instruct HHS to liberally grant waivers from the individual responsibility requirement of the ACA. The ACA gives HHS discretion in granting “hardship” waivers and current regulations authorize HHS to do this through guidance. The Obama administration authorized hardship waivers in a number of circumstances, and one can imagine Trump’s HHS granting hardship exemptions even more broadly, perhaps even through guidance.
But surely the term “hardship” is not meaningless—simply being required to purchase health insurance is not in itself a hardship, because that is what the individual responsibility law requires. Were the Trump administration to effectively repeal the mandate, it would certainly be sued. Individuals with preexisting conditions left in a market without healthy enrollees would have a strong argument for standing. Also, as the Congressional Budget Office has acknowledged, repealing the individual responsibility requirement could have a devastating effect on the individual insurance market if it is not replaced by another means of encouraging healthy people to enroll. Would the Trump administration want to risk destroying the individual market through executive action? We will see.
An interesting question is what effect this will have on Congress. At least some in Congress, perplexed as to how to proceed with repealing and replacing the ACA, may see this as giving them some breathing space. They may say that with Trump taking steps to reduce the burden of the ACA they can take more time to figure out how best to change it. If the order allows Congress to proceed more deliberately, that may not be a bad thing.
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Prof. Timothy Jost, Day One And Beyond: What Trump’s Election Means For The ACA, Health Affairs Blog, January 20, 2017, http://healthaffairs.org/blog/2017/01/20/trump-executive-order-on-aca-what-it-wont-do-what-it-might-.... Copyright ©2017 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.