ACA What Agencies Can Not Do

ACA What Agencies Can Not Do

Our Thinking / Healthcare /

ACA What Agencies Can (Not) Do?
Calendar26 January 2017

Almost immediately following the swearing in, President Trump signed his first executive order directing HHS, DOL, Treasury and other agencies within the government to waive, defer, grant exemptions from or delay provisions of the ACA that impose financial or regulatory burdens, to the extent allowed under the law. So what exactly is allowed? Here are the three main ways the administrative branch can exert influence over the ACA:

  • Agencies can modify or revoke final rules through rulemaking process
  • Agencies can decline to enforce (though not permanently ignore) statutes or final rules
  • Proposed regulations can be ignored or revoked

Much has been written speculating about actions that will be taken under the executive order. The agencies could start to influence the individual mandate (by not enforcing penalties), subsidies (by seeking approval for temporary spending authority to reimburse insurance companies for plan design credits already paid), birth control coverage (making exemptions for religious non-profits) and Medicaid (allowing states more flexibility). However, the executive order should not affect the coverage of those currently enrolled in public exchange plans, since those plans are locked in for this year.

From an employer perspective, perhaps the biggest concern is the long term health and viability of the individual market. The ACA was designed to strike a delicate balance between requiring coverage to support a risk pool and insurance requirements to issue coverage, although that alignment has not been satisfactorily achieved thus far. Subsidies for health plans and the individual mandate are both “balancers” that were baked into the ACA, and removing or undermining them while the rest of the law remains in effect could have a negative impact on market stability. Market instability is bad for everyone, not just the individual market and those who rely on it. 

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