Trump and Obamacare: Where we go from here

Some Trump supporters hoping they don't lose Obamacare
Some Trump supporters hoping they don't lose Obamacare

President Trump's executive order on Obamacare Friday reaffirmed his commitment to dismantle the health reform law. But it could have little tangible impact on the law... at least initially.

The order directed the Health and Human Services secretary and the heads of other agencies to minimize the financial burden of Obamacare on Americans, states, insurers, health care providers and others to the maximum extent permitted by law.

Therein lies one of the main hurdles to quickly taking down the Affordable Care Act. Much of Obamacare is controlled by law or by a hefty slew of regulations that an executive order can't undo with the stroke of a pen.

What the Trump administration can do is tinker with the guidance that enables agencies, states, insurers and others to actually implement Obamacare. Also, the Health secretary can be more liberal with his use of waivers in order to loosen some provisions or allow states to tailor their implementation of certain aspects of the law, particularly Medicaid expansion.

Related: Trump issues executive order to start rolling back Obamacare

"It's a mix of symbolic arm waving (lacking more specific and targeted details) and directional guidance to empower Trump administration officials to lean against more regulation on the margin," said Tom Miller, resident fellow at the American Enterprise Institute, which has long opposed Obamacare. "What remains unclear is how far they can go before they bump up against clearer statutory requirements and existing final regulations."

Here are some examples of what the executive order could do:

Loosening guidance: The Health secretary -- Trump's pick Tom Price has yet to be confirmed -- could revise the guidance they've issued to carry out the Affordable Care Act's regulations.

Even more so than many other laws, Obamacare has largely been implemented through regulation and the Obama administration continued to make adjustments for years, delaying some provisions such as the mandate that employers provide affordable policies, tightening the rules on who can still sign up for coverage after open enrollment ends and revising the risk formula that governs how insurers are compensated if they have a large share of sicker and costly enrollees.

Related: Why it's so hard to replace Obamacare

Trump appears to be taking aim at the individual mandate, which requires that nearly all Americans get insurance or face a penalty.

"What President Trump is doing is, he wants to get rid of that Obamacare penalty almost immediately, because that is something that is really strangling a lot of Americans to have to pay a penalty for not buying," Kellyanne Conway, Trump's senior adviser, said on ABC News "This Week" on Sunday.

His administration might loosen the criteria for qualifying for a hardship exemption, which would allow more people to remain uninsured without paying a penalty.

However, experts said he cannot simply waive the mandate or penalty or broaden the exemption so much that it essentially nullifies it without facing lawsuits. Also, weakening the mandate too much could prompt healthy people to stop buying coverage, which could prompt insurers to pull out.

Under the order, officials could also opt not to impose penalties for certain infractions of Obamacare provisions. For example, some companies, particularly small businesses, used to provide workers with money to buy their own individual health insurance. Under Obamacare, those employers can be slapped with a penalty of $100 per day, per person. Trump could suggest to his new IRS commissioner that enforcing the rule is counterproductive and a waste of resources, especially when Congress plans to replace Obamacare.

Granting more waivers: Trump's executive order also directed agencies to provide greater flexibility to states to run their own health care programs.

The Obama administration already granted states waivers allowing them to tailor the way they administer Medicaid expansion. For instance, it allowed some to charge premiums and co-pays. Under Trump, more will likely be allowed to require participants to work -- a request Obama officials never granted. (States will still have to apply for these waivers and the Centers for Medicare and Medicaid Services must review them, a process that could take months.)

Yet, another major obstacle to delivering swift blows to Obamacare is Trump and Congressional Republicans' repeated promises not to leave millions of Americans without insurance.

Related: How Trump could use his executive power on Obamacare

"For the 20 million who rely upon the Affordable Care Act in some form, they will not be without coverage during this transition time," Conway said on Face the Nation Sunday.

That vow limits the extent to which Trump can upend the law's provisions. Changing them too much or injecting too much uncertainty into the market could prompt health insurers to flee next year, which might leave some Americans without options and others forced to pay higher premiums. These are the very problems with the current law that Republicans criticize so they will be wary to take actions that exacerbate them.

The main lobbying organization for health insurers said only that it has been meeting with policymakers to offer its recommendations.

"There is no question the individual health care market has been challenged from the start. The president said he would take swift action, and he has," America's Health Insurance Plans wrote in a statement. "We look forward to working with the administration as well as members of Congress to ensure health care works to lower costs for all Americans."

While insurers are bound by contract to provide coverage in 2017, nothing requires them to continue next year. The carriers are in the final stages of determining their participation and rates for 2018, which they will file with state regulators this spring. They will be watching the administration's moves to make sure it doesn't do anything that leaves them with a pool of sicker and costlier consumers.

Related: Even as they repeal Obamacare, Republicans still have to fund it

"The short of it is that the Trump administration, by trying to bring relief to some consumers, could just as easily further undermine the already shaky Obamacare risk pool," Robert Laszewski, an Obamacare opponent who runs Health Policy and Strategy Associates wrote in a blog post Sunday morning.

The real work of undoing Obamacare, however, will likely proceed along a two-track system -- through changing regulations at agencies and passing new laws in Congress. Both of those will take more time, especially considering Price has yet to be confirmed and Republican lawmakers remain divided on how to repeal and replace President Obama's landmark health reform law.

Related: Why GOP governors like Medicaid under Obamacare. Hint: $

The Trump administration can make changes to Obamacare's regulations. But this requires an agency to publish the proposed changes, allow the public to comment and then write a final rule, a process which can take up to two years.

Meanwhile, Republicans in Congress are already on the path to repealing major provisions of Obamacare, though they have yet to decide how and when to come up with a replacement plan. Even after they pass a law changing Obamacare, it could take two or three years for the agencies to pass new regulations and then insurers to come up with new policies to offer consumers.

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