2016 Election

What is the Meaning of Trump’s Day 1 Executive Order on the ACA?

Guest Post by Erin C. Fuse Brown On the day of his inauguration, President Trump signed an executive order instructing the executive branch agencies to exercise their discretion and authority to  “waive, defer, grant exemptions from, or delay the implementation of” fees, taxes, or penalties under the Affordable Care Act (ACA). The order does not specify…

Guest Post by Erin C. Fuse Brown

On the day of his inauguration, President Trump signed an executive order instructing the executive branch agencies to exercise their discretion and authority to  “waive, defer, grant exemptions from, or delay the implementation of” fees, taxes, or penalties under the Affordable Care Act (ACA).

The order does not specify which “fiscal burdens” it targets, but the individual mandate, the employer mandate, and the various industry and payroll taxes imposed by the law immediately jump to mind. These are all written into the law, and the President cannot unilaterally set them aside. The executive order says it is following the law, including the Administrative Procedure Act, which is good because it means the President is not instructing anyone to flout the law. Even existing ACA rules cannot be undone overnight and can only be changed or repealed through a lengthy notice-and-comment rulemaking process.

There is such a thing as “enforcement discretion,” which some suggest means that the individual mandate won’t be enforced anymore. I’m not so sure. If the President instructed the IRS to stop collecting taxes from billionaires under its enforcement discretion, that wouldn’t be legal.

Even if people get the impression that the mandate is no longer going to be enforced, it is probably not that big a deal compared to the real threat of ACA repeal itself. Here’s why: open enrollment for 2017 Exchange plans ends very soon (January 31), and it’s unclear how many people who would have signed up for insurance will change their minds based on this executive order. Maybe there are some people who signed up only because of the mandate and without it will stop paying premiums and drop out. Maybe. I just don’t know how many people fall into that category. More are likely scrambling to secure subsidized coverage on the Exchanges while they still can. To the extent consumers are paying attention to these political machinations, they would be well-advised to keep their plans because a continuous coverage mandate may be coming soon if they want to be covered for preexisting conditions. The individual mandate is pretty weak anyway and likely is not doing much to get healthy people to enroll who otherwise choose not to. I’m not saying the individual mandate doesn’t matter to the framework of the ACA (it does), but in these times of uncertainty, there are far bigger existential threats to the ACA than the impact of this executive order on the individual mandate.

What can we take away from the executive order? President Trump wants to send a loud political signal that he is committed to deregulating health care and repealing the ACA, which we already knew. It means he is not going to wait around for Congress to do what he can on his own to undermine the ACA. What Trump does on House v. Burwell and the cost-sharing reduction payments will be particularly instructive. However, this haste to dismantle the ACA may be politically tough for Congress if insurance markets are thrown into chaos before it has a chance to put forth a replacement.

One could also read Section 3 of the executive order to green-light HHS to approve state Medicaid and Section 1332 waivers more readily. It instructs the agency heads to “provide greater flexibility to States and cooperate with them in implementing healthcare programs.” States could play a critical role in crafting their own health care policies under Trump, and this is an invitation to start that negotiation.

President Trump’s executive order on the ACA makes a lot of noise that is more symbolic than substantive. I would stop short of saying the executive order itself could “gut” Obamacare, but Congress is poised to do that anyway. Trump’s actions show that he wants to stay at the center of that process.