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October 16, 2017

4 more ways Trump could change the ACA—without Congress

Daily Briefing

    By Ashley Fuoco Antonelli, contributing editor

    On day one of his presidency, President Trump signed an executive order that directed federal agencies to "ease the burden" of the Affordable Care Act (ACA)—making it clear that he intended to take a different approach to health policy than former President Barack Obama's administration.

    Since then, the Trump administration has taken several actions that ACA advocates say could undermine the law: cutting ACA open enrollment outreach funding by 90 percent; reducing ACA navigator grants; shortening the open enrollment period; scaling back federal participation in enrollment outreach; and issuing interim final rules that expanded employer exemptions to the ACA's contraceptive coverage rules.

    All the while, Trump has routinely expressed disappointment that GOP lawmakers have not been able to coalesce around a bill to repeal and replace the ACA—and Thursday, on day 265 of his presidency, he signed an executive order intended to ease some health insurance regulations under the ACA and announcing his administration will no longer make the law's cost-sharing reduction payments to insurers.

    Those actions could have major effects on patients, insurers, and the stability of the ACA's exchanges, and Trump on Thursday said it was "only the beginning" of changes the administration might make.

    Here are four key ways the Trump administration could further weaken the ACA without Congress.

    1. Weaken enforcement of the ACA's coverage mandates

    Some experts have said Trump could direct the IRS to stop enforcing the ACA's individual and employer mandates, and a Trump aide early this year indicated the president could seek to do just that. Without the threat of a penalty for remaining uninsured, some U.S. residents—particularly healthy individuals—could choose to drop their exchange coverage, which could further skew insurers' risk pools and ultimately drive up premiums. However, experts say such action could be subject to legal challenges.

    So instead, the New York Times' Haeyoun Park and Margo Sanger-Katz write the Trump administration could seek to further weaken enforcement of the mandates by broadening exceptions under the law, "making it easier to avoid the tax penalty" that comes with incompliance.

    2. Toss out federal exchange contracts

    In addition, Jack Hoadley, a health policy research professor at Georgetown University's McCourt School of Public Policy, last year told Daily Briefing that the Trump administration also could choose not to enter into contracts necessary to run the federal health insurance exchange. However, Hoadley said such moves also could spark legal challenges from ACA supporters who could claim Trump is not fulfilling his duty to enforce the law, which specifically calls for the exchanges.

    3. Make subsidies less generous

    The Trump administration also could implement policies that would make the ACA's subsidies, which help offset exchange enrollees' premiums costs, less generous. According to Park and Sanger-Katz, the administration in a final rule slightly scaled back the subsidies for the 2018 coverage year.

    4. Implement Trump's latest executive order

    The executive order Trump signed on Thursday did not implement any immediate policies, but instead directed federal agencies to consider changes that would loosen federal requirements on association health plans, short-term health plans, and employer-funded reimbursement accounts.

    Overall, it's hard to say how the executive order ultimately will affect the ACA since we don't yet know what new regulations will come out of it. However, industry experts have said that its goals of expanding access to association and short-term health could threaten the exchange market.

    For example, Larry Levitt, a senior vice president at the Kaiser Family Foundation, in a tweet said, "If association and short-term plans can siphon off healthy people, the ACA-regulated market would be left with a sicker pool to cover." He added, "How much damage the executive order can do to insurance markets under the ACA will depend on arcane details in regulations yet to come." 

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