Relief Is on the Way: What Trump’s Obamacare Executive Order Will Do

A newly inaugurated President Donald Trump rang the opening bell for what will be a multistep process to repeal and replace the Affordable Care Act, or Obamacare, as he signed an executive order on Friday directing his subordinates to:

exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act 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.

While it is true that Congress will need to enact legislation to address Obamacare’s major components, the Trump administration can immediately begin to pare back and rework the law’s numerous and detailed regulations.

In large part, that is because the law itself granted the executive branch considerable discretionary authority to fill in the details through regulation. Those details can now be changed by a new administration, and this executive order makes doing exactly that the official policy of the Trump administration.

As to the substance, the new president’s clear directive is for his appointees to focus on minimizing the damaging effects of the law. That constitutes a sharp change in direction from the one taken by the Obama administration.

The implementation approach taken by the Obama administration was essentially to try to increase subsidized enrollment heedless of any resulting costs or disruptions to either the public or private sectors. This executive order signals that the Trump administration’s first order of business for Obamacare will instead be to minimize those costs and disruptions.

Signing documents to allow Mattis and Kelly to be sworn into Cabinet and an executive order on #Obamacare. https://t.co/zg3WP9w8xC pic.twitter.com/OMOGLTkCDA

— President Trump (@POTUS) January 21, 2017

That will be particularly welcome news for those who faced loss of their coverage and doctors and escalating premiums and deductibles, but received no offsetting Obamacare subsidies.

Their lived experience of Obamacare as “all pain, no gain” was a major factor explaining not only the law’s persistent unpopularity but also why voters in sequential elections handed Republicans control of first the House, then the Senate, and finally the White House.

As for the mechanics, the new administration’s actions to implement this executive order in the coming weeks will reflect considerations of both effect and timing.

The Trump administration is likely to prioritize those changes that will have the biggest and most immediate effects—such as ones that can help stabilize the unsubsidized individual and small employer health insurance markets and head off any repeat in 2018 of the massive increases in premiums announced last fall for 2017.

What is little appreciated, even by Washington policymakers, is that while subsidized Obamacare enrollment has been slowing, the damage the law is doing to unsubsidized markets has been accelerating.

For instance, while insurers exiting Obamacare’s subsidized exchanges was widely reported last fall, less attention was paid to the more disturbing news that a number of insurers were also exiting the unsubsidized individual and small employer health insurance markets as a result of Obamacare.

The administrative actions called for in this executive order can help to shore up those nonexchange markets.

Furthermore, the Trump administration acting (wherever possible) to quickly roll back Obamacare’s voluminous and detailed regulations will support and encourage congressional efforts to advance repeal and replace legislation; signal a new direction for health reform to insurers, providers, employers, and other stakeholders; and offer consumers tangible evidence that relief is on the way.