Patient Financial Services



Within hours of the inauguration, President Trump signed his first Executive Order which took aim at one of the key issues he campaigned on: the dismantling of the Affordable Care Act (ACA). There has been ample speculation as to how the ACA will change under the Trump Administration. So what does this Executive Order mean for the law in the immediate future and for those who receive coverage under it?

The ACA will not instantly change or go away. However, the Executive Order does put the wheels in motion to make changes from an administrative perspective that may impact how certain elements of the law are carried out. Essentially, this order enables agencies to—within the extent of the law—work toward changing aspects of how the ACA is implemented while the Administration continues to work on a long-term strategy for replacing it.

The stated goal of the Executive Order is to "minimize the economic burden" of the ACA on those it affects: individuals, states, providers and insurers. It does not direct government agencies to take any specific actions in order to achieve this, but it does give them the power to make decisions that will alleviate costs imposed by the ACA on these stakeholders. This could mean writing new regulations or granting waivers to certain ACA provisions, such as the individual mandate. The Executive Order also encourages agencies to stop issuing regulations that drive further implementation of the law and expand its reach.

That said, we may not see many effects of the Executive Order this year, according to a PBS article, because government rules for 2017 have already been incorporated into insurance contracts. Beyond that, changing regulations can take months or years and must be done through a legal process called notice and comment, which provides public notice of intended changes and gives stakeholders an opportunity to comment. It should also be noted that a full repeal of the law can only be done through Congress.

Because the Executive Order does not directly change the ACA, key aspects of the law remain untouched for now. This includes foundational elements of the law, including requirements of insurers and financial assistance available to individuals to obtain coverage. As a result, Medicaid expansion, premium tax credits and cost-sharing subsidies remain intact—but for how long remains to be seen.

What the Executive Order could do is lead to exemptions for consumers from the financial penalties associated with the individual mandate. And that could have a broader reaching implication on the marketplace. If consumers are exempt from these penalties, it may give them reason to forego coverage—especially younger, healthier individuals. A large drop-out of the market's healthiest consumers could have significant impact on the stability of the marketplace and lead to higher premiums for those who stay enrolled. According to some health policy analysts these types of outcomes and shifts could lead to the collapse of the marketplace, particularly if exemptions like these are rolled out before an ACA replacement is ready.

At this stage, how it will unfold is mere speculation. But one thing is certain, although the Executive Order does not directly or instantly change the ACA, it does signify the Trump Administration's commitment to undo and replace the law. What that replacement will look like has everyone guessing.