President Trump’s Executive Order on Affordable Care Act—what does it mean?

January 23, 2017

Shortly after the inauguration ended on Friday, President Donald Trump signed his first executive orders. Among them was an order directing Health and Human Services (HHS) and other agencies to dismantle, as allowed by the maximum extent of the law, “any provision…that would impose a fiscal burden on any State, or a cost, fee, tax, penalty or regulatory burden on an individual.” The order also directs the HHS Secretary and the heads of all other departments and agencies to “provide greater flexibility to States and cooperate with them in implementing healthcare programs”—again, to the maximum extent permitted by the law.

At the Prevent Cancer Foundation®, we are looking at what this means for the Affordable Care Act (ACA). The key phrase here is the one that repeats over and over in this Executive Order—“to the maximum extent permitted by the law.” The administration has indicated its likely looking at ways to limit or alter the implementation of the Affordable Care Act. However, it can only do so through what is permitted by the law. The Affordable Care Act, in large part, cannot be altered except through congressional legislation.

However, the agencies’ rulemaking powers can alter the following:

Requirements for certain preventive services

The Affordable Care Act considers women’s health—including human papillomavirus (HPV) vaccines, contraception and regular pap smears—and preventive health measures to be “essential health benefits,” and as such are required to be covered by all insurance policies. While all preventive services receiving an “A” or “B” grade from the U.S. Preventive Services Task Force (USPSTF) are supposed to be covered by all insurance policies with no co-pays or barriers to access, ultimately it is HHS that provides the list of all essential health benefits.  It is possible that HHS could limit what insurance companies are required to cover.

The individual mandate

One of the most well-known and most unpopular provisions of the ACA is the requirement that all individuals have insurance coverage.  Anyone who does not have coverage must pay a fee. However, those who cannot afford insurance, even with a subsidy, are allowed to apply for a “hardship waiver.”  It would be possible for HHS to increase the number of “hardship waivers” they grant.  For this reason, some have said that this executive order could eliminate the individual mandate. In reality, though, the mandate could not be eliminated—it is only the enforcement of it that could be lessened. We would need to wait to see how would be implemented in practice to determine what it would mean for the individual mandate.

Number of Medicaid waivers

States that are interested in Medicaid expansion have to meet certain standards in order to receive federal funding. However, they are permitted to apply for waivers that allow them to design their own state programs, which are often granted as long as the programs still meet the spirit of the law and provide Medicaid coverage to those at or below 138 percent of the poverty line.  States such as Indiana have designed their own programs that include a requirement that most Medicaid recipients pay into the program. Other states have examined the possibility of work requirements.  The executive order clearly states that the administration’s policy is to give greater leeway to the states and increase the number of waivers it grants. The administration stated this policy early on, however, so this executive order does not substantially change expectations.

To summarize, it is possible there will be changes to the Affordable Care Act even without congressional action, and there is a great deal of uncertainty in the insurance market.  In practice, though, this executive order does not change what is possible or what is allowed under the law.  We will have to wait until the agencies are fully staffed and any new rules are passed before we fully understand what will change.

The Prevent Cancer Foundation® is committed to keeping you informed about changes that may affect your health care. Check back often for more updates on changes coming to the Affordable Care Act and more.

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