President Trump Issues Directives on Regulatory Freeze, Affordable Care Act
January 23, 2017 by Laura Meckler
WASHINGTON—President Donald Trump issued his first executive order Friday, directing federal agencies to do what they can to pare back provisions of the Affordable Care Act and laying the groundwork to potentially gut the requirement that Americans carry health insurance, which lies at the heart of the law.
The executive order, signed just hours after being sworn in, directs that agencies waive or delay any provision deemed a burden to individuals, health care providers or insurance companies.
The order doesn’t strike down the law, which Republicans in Congress are poised to repeal. Individuals who have bought coverage for 2017 on the health law’s exchanges will still have insurance and insurers will still participate this year.
“It is imperative for the executive branch to ensure that the law is being efficiently implemented, take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market,” the order said.
THE TRUMP INAUGURATION
Also Friday, his chief of staff, Reince Priebus, ordered a freeze on regulations in a memo to all federal agencies, a typical move by a new administration.
The directive on the health-care law is more unusual and aimed at the heart of his predecessor’s most sweeping accomplishment.
The broadly written health-care order appears to lay the groundwork for waiving or minimizing the penalty for Americans who don’t buy health insurance, which would essentially void the requirement altogether. That would cause problems for insurers, who worry their healthiest customers would forgo the coverage, leaving only sick patients who are the most expensive to cover.
Already, insurance companies in a number of states worry that their markets are in shaky condition, and anything that drains healthy customers could be a fatal blow to the individual insurance markets, including the health-care exchanges where people can shop for subsidized coverage.
“To the maximum extent permitted by law,” the order said, agencies shall use their discretion 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, health-care providers, health insurers, patients, recipients of health-care services, purchasers of health insurance, or makers of medical devices, products or medications.”
One question is how much leeway the law actually grants, a matter that could wind up in the courts at some point.
“It’s a wide-ranging order that could have major ramifications for the ACA,” said Larry Levitt, senior vice president at Kaiser Family Foundation. “It suggests that broad waivers could be granted exempting people from the individual mandate penalty, which could create chaos in the individual insurance market.”
It isn’t clear how deeply the new administration would pare back the law’s central requirements, or how quickly. It is possible the executive order could be used as a lever to push Congress to act faster to resolve the law’s future.
“In and of itself, it does not take action, but clearly empowers action,” said Mike Leavitt, the former Utah governor and Health and Human Services Secretary and a leading figure in shaping Republican health policy. “It establishes the tone and intensity with which President Trump intends to pursue change in health care.”
The order also directs agencies to give states as much flexibility as possible in implementing the law. Under the Obama administration, states negotiated for flexibility and won some accommodations. It is clear they will have an easier path under Mr. Trump.
Waivers could allow states to end the requirement most employers provide health insurance or to loosen requirements that insurers provide certain mandated benefits.
It also directs that agencies involved with health care “encourage the development of a free and open market in interstate commerce” regarding health care. It said the goal is to achieve “maximum options for patients and consumers” but doesn’t lay out any specifics.
The broad regulatory moratorium, which was expected, may block late actions by regulators during the Obama administration that haven’t yet been published in the Federal Register, which generally occurs in the weeks after regulations are proposed or adopted. That calls into question the future of a new bailout-prevention rule the Federal Reserve completed last month that has yet to appear in the Register.
On Friday, Mr. Trump also signed commissions for two newly confirmed cabinet secretaries, James Mattis for defense and John Kelly for homeland security, both cleared Friday by the Senate.
Reporters were brought into the Oval Office to watch Mr. Trump sign the orders. The president, still dressed in the suit and tie he wore while taking his oath of office, was asked about his day.
“It was busy, but good. A beautiful day,” he replied.
Changes to the Oval Office were already apparent: a bust of the late British Prime Minister Winston Churchill had been returned. Weeks into his presidency, President Barack Obama caused a stir when he removed a bronze bust of Churchill, lent by the British Embassy, from the Oval Office and replaced it with a bust of the Rev. Martin Luther King Jr. On Friday, Mr. Trump had the bust of Dr. King in the Oval Office as well.
Corrections & Amplifications
Mr. Trump is keeping a bust of the Rev. Martin Luther King Jr. in the Oval Office. An earlier version of this article incorrectly said it had been removed. (Jan. 20, 2017)
—Louise Radnofsky and Stephanie Armour contributed to this article.
