Lessening the Burden of the Affordable Care Act - What We Know

Published on Thu, 01/26/2017 - 00:29
trump ACA

Republicans have been talking about repealing the Affordable Care Act for years, and on President Trump’s first day in the office, he made steps toward doing just that. While the Affordable Care Act is still law, an executive order signed by the newly inaugurated president may undo much of it.

What Does the Executive Order Say?

The executive order does not specify parts of the Affordable Care Act. Instead, it uses sweeping language to give agencies the ability to reduce financial burdens imposed by the health care law. It states that the heads of executive departments and agencies have the authority to waive or delay any requirement that is deemed a financial burden for states, individuals, insurers or health care providers.

Another section of the executive order calls for more flexibility for states in the implementation of their health care programs.

What Does the Executive Order Mean?

Due to the vague language, the exact consequences of President Trump’s executive order remain unknown. However, certain parts of the Affordable Care Act—those that Republicans have criticized for costing individuals and states too much—are likely targets.

The individual mandate, which imposes a tax penalty on individuals who choose to forgo insurance, is one of those likely targets.  Following the executive order, enforcement of the tax penalty could be reduced. This alone would have a major impact on the Affordable Care Act, which relies on the participation of healthy individuals.

The section calling for greater flexibility as states implement health care programs may have implications for Medicaid. Kellyanne Conway, an adviser to President Trump, has stated that the eventual Affordable Care Act replacement will include a block grant to states for Medicaid, meaning that states will receive a set amount of funding to be used as seen fit by the state.         

What’s Next for the Affordable Care Act?

The executive order also reaffirms President Trump’s plan to carry out a complete repeal of the Affordable Care Act. The order is presented as a temporary measure until that full repeal can be completed.

It is not known how long the full repeal of the Affordable Care Act will take, or how Trump’s administration will replace it. For the time being, the Affordable Care Act stands, although in a potentially weakened state.

For those who feel that the act has resulted in a financial burden for individuals, insurers and states, the executive order may provide some relief. One of the next steps will involve seeing how executive heads respond to the order to reduce this burden.  As always, Heffernan Benefit Advisory Services is here to help you navigate group health decisions.