What Does President Trump’s Executive Order Mean for the Affordable Care Act?

As you may have heard, President Trump issued an executive order about the Affordable Care Act (ACA) on his inauguration day, but what’s been less clear is what exactly it means. Can the President repeal the ACA by executive order?

The short answer is no. The ACA became law when it was passed by Congress and signed by President Obama, therefore its repeal must also be passed by Congress and signed by the President. (Congress is still working on a repeal plan based on the reconciliation bill President Obama vetoed, and they are hard pressed to come up with a unified replacement plan, though Senators Cassidy and Collins released a one pager describing one today—time will tell if it’s one that gains any real traction.) But as those of you who follow regulations closely already know, the regulations following enactment of the ACA helped flesh out the statutory provisions and provide states, providers, insurers and beneficiaries with much needed additional information about how the ACA works. The President can overturn those regulations – but only by going through the full regulatory process and justifying the departures from regulations issued earlier. This is a lengthy process, taking as much as a year (or more) depending on the regulation.

So what does this executive order do? Perhaps most importantly, it sends a strong message that the President would like Congress to repeal the ACA. In the meantime, the President is signaling that existing ACA regulations may be modified or simply not enforced. One such provision under much speculation following the executive order is the individual mandate. The individual mandate is the requirement that individuals have health coverage or pay a penalty for being uninsured. But as Sabrina Corlette notes in a blog on the impact of repealing the ACA, the individual mandate is inextricably linked to two other policies – (1) ensuring people with pre-existing conditions can still get coverage and (2) making insurance affordable by offering premium tax credits and cost-sharing subsidies. Failing to enforce the individual mandate would jeopardize the ability of these other two, more popular provisions, and could lead to market collapse, something leaders on both sides of the aisle have vowed to avoid.

The executive order also calls on the Secretary of HHS to wield his/her waiver authority over any requirements in the ACA that could create a fiscal burden on states, individuals, providers, and insurers, among others. This could come in the form of Medicaid waivers under section 1115 of the Social Security Act or marketplace waivers under section 1332 of the ACA. As readers of Say Ahhh! already know, monitoring 1115 waivers is part of daily life for our Executive Director Joan Alker, so check out blogs on past 1115 waiver proposals that could be in vogue again like Indiana (up for renewal soon) and Kentucky (pending before CMS now).

Only time will tell what actions the Administration will take under this new executive order, but we’ll be watching, so stay tuned.