Trump Signs Executive Order on ACA

Understand Trump’s Executive Order

Trump signed an Executive Order on the Affordable Care Act (ObamaCare) on his “first day” as President to “prepare” for the law’s repeal.

TIP: If you just want to know how the order affects the mandates, see: Trump Executive Order on the ObamaCare Mandates (the Fees) Explained.

A Summary of What the Executive Order Does

The executive order doesn’t affect the law as written, but will affect the way its provisions are interpreted and implemented within legal guidelines in two major ways:

1. First, it instructs the Executive Branch (Trump, Pence, and their cabinet members) to “… take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.”
2. Second, the order instructs all the current administrations who have responsibility under the Affordable Care Act 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 [Patient Protection and Affordable Care Act] that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on” everyone, including insurers.

What Does the ACA Executive Order Do?

It does nothing to the core elements of the law. It does, however, provide a glance in the direction that Trump intends to take in forming a replacement plan. President Trump ordered the Secretary of Health and Human Services, (this was Tom Price, but now Eric Hargman is acting director); Secretary of Treasury, Steve Mnuchin; and administrator of the Centers for Medicare and Medicaid Services, Seema Verma to work within the law as it stands to reduce regulatory and financial burdens to any person, state, or other entity affected by the provisions of the law.

The departments and their leads have a lot of authority to interpret elements of the law, to set industry standards and penalties, as well as to define industry relevant terms (like medical and insurance terminology standards for insurers). They also have nearly complete authority to create the paperwork and the various processes. All of the authorities afforded by Affordable Care Act provisions have specific guidelines and limitations for administration to follow too, though.

The Executive Order and Potential for Reduced Oversight on Insurers

During his time as the HHS Secretary, Tom Price had particular authority with regards to penalizing insurers for not following the rules and setting the standard for health insurers reports and their provision of coverage. Depending on how you interpret the language of the Executive Order, it could lead to less reporting requirements and oversight, or minimal penalties for insurers who don’t follow the rules protecting consumer coverage and transparency.

The Executive Order and State Innovation Waivers

Reading between the lines, Trump seems to be telling Tom Price, Seema Verma, and states fairly clearly to begin granting more ACA waivers to states for State Innovation. The Medicaid Expansion Waiver 1115 gives states increased control and administrative flexibility to improve access, efficiency and coverage of the state-administrated program Medicaid and CHIP. Across the country, states have already been using waivers to redefine the types of benefits covered, the eligibility criteria, and the benefits administered under the Social Security Act (which has been amended many, many times). Ultimately, the SSA as it stands lays out minimum standards for residents the states must cover under their Medicaid programs. The Waivers allowed states to customize many elements of their Medicaid, but only if the changes improved upon the minimum requirements. The executive order is clear, HHS is instructed to grant as many waivers as possible and to reduce the paperwork required (and regulated) by the HHS. This could have unintended consequences since states will be given little oversight to ensure they are making progress and keeping their promise to improve access and reduce the costs.

Another State Innovation Waiver just became available to states on January 1st, 2017. Waiver 1332 was a delayed provision of the Affordable Care Act. This waiver allows states flexibility in the way that Marketplace Cost Assistance funding is used so they can create unique statewide systems for improving their residents’ access to affordable insurance and care options. By combining both waiver funding methods, states can effectively expand a type of subsidized custom Medicaid program to all of their state’s residents in exchange for the cost assistance the state’s residents would have been eligible for, Premium Tax Credits and Cost-sharing Reduction Subsidies. This is a good sign for states which are looking into using existing federal public healthcare funding to provide single payer or public options, but the amount of funding a state is eligible for is under the control of the Treasury. The provisions include guidelines, but it’s unclear how those would be interpreted under this all-inclusive “burden” reduction executive order.

The Executive Order and Exemptions

There is some relief for working families and those who are having difficulty getting affordable coverage that can be implemented by the HHS immediately. HHS is responsible for granting exemptions to people and families from the requirement to purchase health insurance due to financial or other hardship and has the responsibility to create the process used to apply for exemptions. The executive order indicates that these types of exemptions will be made more accessible and easier to apply for as quickly as possible. That should offer immediate relief for millions of working families who are struggling to find affordable coverage options, who live in states that have yet to expand Medicaid, or who are experiencing some other form of financial hardship. This might even include many currently awaiting exemptions approvals.

HHS also has authority under the ACA to grant insurers limited exemptions from the requirements of some provisions of the Affordable Care Act, as well as, a significant amount of authority over the actual administration of the reporting process (the paperwork) and set penalties for insurers who violate the rules. The implications of a poorly enforced or under-reported insurance regulation may make the consumer protections of the ACA ineffective.

The Executive Order and Grants

The HHS is responsible for awarding and administering grants for expanding healthcare access through community health centers, innovation, research, and reporting requirements. The executive order isn’t specific about who gets priority when it comes to the many “burdens” of the ACA. Relieving the burden on taxpayers could come at the cost of funding programs that help to expand access to primary care and for quality improvement measures.

What the ACA Executive Order Does NOT Do

It doesn’t eliminate any of the mandates or taxes. Individuals may find it easier to get hardship exemptions from the tax for not having insurance more often or more quickly, but that’s yet to be seen or announced.

It won’t eliminate the required paperwork and processes. These government institutions can decide what the paperwork looks like and how it is processed, but they are responsible for performing the obligations assigned them under the law.

It won’t change anything about any insurance for this year or the requirement to have minimum essential coverage if you can afford it. Open enrollment is starting on November 1, 2017, so if you need coverage for 2018, you should get enrolled as early as possible.

TIP: See the full text of the order and brief explanation for more details.

Learn more from the NYTimes: What Does Trump’s Executive Order Against Obamacare Actually Do?