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Opinion Can President Trump’s executive order unravel the Affordable Care Act?

President Trump signs his first executive order in the Oval Office directing agencies to ease the regulatory burdens associated with Obamacare. (Video: Reuters)

As promised, newly inaugurated President Donald Trump issued an executive order directing members of his administration to take steps that will facilitate the repeal and replacement of the Affordable Care Act, a.k.a. Obamacare. Is this a big deal? It depends.

As a formal matter, there is only so much that an executive order can do. EOs are not the only form of executive action, and they are not a particularly important one. They are simply one means for the president to exercise the authority that has already been delegated to the executive branch.

As Nicholas Bagley notes, EOs are, in many respects, a communications strategy. They are a formal, public means of declaring administration policy and providing clear, across-the-board directives to federal agencies. Instead of telling executive branch officials individually to take specific actions, an EO enables the president to tell the entire executive branch to begin taking certain sorts of actions, such as to develop policies and proposed regulations or administer federal contracts in a particular way (and provided that the instructions do not conflict with federal law).

This specific EO reiterates that it is administration policy to seek the repeal and replacement of the ACA and directs relevant agencies — Health and Human Services, Treasury, etc. — to utilize their authorities under the act “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 heart of the order, Section 2, directs federal agencies as follows:

To the maximum extent permitted by law, the Secretary of Health and Human Services (Secretary) and the heads of all other executive departments and agencies (agencies) with authorities and responsibilities under the Act shall exercise all authority and discretion available to them 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, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.

Under normal circumstances, this would not mean much, as it would simply direct agency officials to use whatever discretion they have to loosen the ACA’s constraints and burdens on states, individuals and insurance companies, and the ACA offers only so much flexibility. Therein lies the rub.

The Obama administration was particularly aggressive in asserting the authority to grant waivers, defer burdens and delay implementation of various ACA provisions, even where the law did not authorize such acts. Put in the most charitable terms, the Obama administration took a particularly elastic view of what the executive branch could do under the law. But don’t just take my word for it. Bagley has documented these transgressions at length. (I’ve also discussed these actions in various papers and testimony.)

As Bagley notes with regard to this EO, many of the Obama administration’s actions implementing the ACA will make it easier for the Trump administration to take equivalent actions of questionable legality. The lawfulness of executive action is often evaluated by reference to prior executive practice, so the Obama administration’s success in taking such steps (and the relative silence of the legal commentariat, Bagley excepted) will strengthen the Trump administration’s hand when it begins granting questionable waivers, suspends requirements under the guise of exercising enforcement discretion and opts to place a hold on unpopular provisions. And as the initial steps toward repeal-and-replace further destabilize insurance markets, this will only justify additional waivers and suspensions, all made in the name of minimizing disruption and enhancing administrability.

Bagley warned that this could happen. Writing in the New England Journal of Medicine, Bagley explained how the Obama administration’s unilateral delays of the employer mandate penalty and other measures could be turned against the act by an unsympathetic president.

The delays nonetheless set a troubling precedent. . . .  a future administration that is less sympathetic to the ACA could invoke the delays as precedent for declining to enforce other provisions that it dislikes, including provisions that are essential to the proper functioning of the law. The delays could therefore undermine the very statute they were meant to protect — and perhaps imperil the ACA’s effort to extend coverage to tens of millions of people.
More generally, the Obama administration’s claim of enforcement discretion, if accepted, would limit Congress’s ability to specify when and under what circumstances its laws should take effect. That circumscription of legislative authority would mark a major shift of constitutional power away from Congress, which makes the laws, and toward the President, who is supposed to enforce them.

With its initial EO, the Trump administration is seeking to make Bagley’s warning prophetic.

As I read the EO, it also ensures that state waivers will be granted on very generous terms and that HHS will quickly settle any remaining lawsuits concerning the so-called contraception mandate. After all, since some religious employers are effectively exempted from the mandate, there is no argument that HHS lacks the authority to accommodate those employers, such as Little Sisters of the Poor, who believe that the mandate burdens their exercise of religion.

Josh Blackman has additional comments on the EO here and here. Dan Diamond reports further here.