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What Does President Trump’s Executive Order on ACA Mean?


Donald Trump’s first act after assuming the presidency was to sign an executive order that authorizes federal agencies to scale back as many parts of the Affordable Care Act as possible within the confines of the law.

The executive order does not abolish the landmark legislation, but sets the stage for agencies to act immediately on regulations that are deemed overly burdensome. The agencies, particularly the Department of Treasury and the Department of Health and Human Services (HHS), will have wide latitude in making regulatory changes thanks to the broad scope of the order.

But don’t expect immediate changes in the law. Regulations cannot be rewritten, amended or replaced without going through the rule-making process, which includes notice and comment periods. That can take months, or sometimes years.

Another reason you should not expect immediate change is that the order specifically states that agencies can act only “to the maximum extent permitted by law.”

The order came on the heels of the House of Representatives approving a budget blueprint that will allow Republicans to repeal major provisions of the ACA without the threat of a Democratic filibuster in the Senate. But that action can only undo parts of the law that have an effect on the federal budget and they would need some cooperation from Democrats to repeal other parts and forge a replacement.

That means that most of the laws and regulations governing employer plans will likely stay in place for the moment, although it’s unclear for how long.

Trump has been on record saying that the repeal of the law should not take place until a replacement plan is also in place, in order to avoid creating disruptions in the market. He also said that everyone in the United States would be covered.

Here are some of the more relevant passages of the executive order:

“…it is imperative for the executive branch to ensure that the law is being efficiently implemented, 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.”

It also said the HHS secretary and other agency heads “shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision… 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.”

As mentioned, the process for making regulations takes time. Proposed regulations have to be drawn up and they have to go out for public comment, including holding hearings so that all sides can argue for or against the changes or recommend adding more changes.

Adding more confusion and concern, Trump senior adviser Kellyanne Conway said that the president may stop enforcing the law’s tax penalty against people who don’t buy insurance. But that move alone could snowball into an ugly scenario where more healthy individuals bale out of their insurance policies, which in turn would likely lead to insurers abandoning the public insurance exchanges.

She said that he would consider repealing the employer mandate quickly, as well. But that may be not be legal as the individual and employer mandates are explicit provisions of the law passed by Congress, and they cannot be overridden by the executive branch.