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Trump's Executive Order Has Limited Power to Disrupt ACA

Monday, February 27, 2017

By Bridget Kuehn

President Trump's executive order targeting the Affordable Care Act (ACA) has limited power to dismantle the law because of built-in legal and administrative constraints, two legal scholars write in a New England Journal of Medicine editorial published online February 22.

With Republicans in Congress' efforts to quickly repeal the ACA stymied by a forceful public backlash and a lack of agreement on how to replace the law, attention has turned to the president's executive order: If Congress fails to repeal the law, could the executive order be used to dismantle it? Not without courting legal challenges, say Timothy Jost, JD, a professor emeritus at Washington and Lee School of Law in Lexington, Virginia, and Simon Lazarus, JD, senior counsel at the Constitutional Accountability Center in Washington, DC, in the editorial.

"President Trump cannot repeal the ACA by executive order," they write. "The ACA is a statute, enacted by Congress, which under the Constitution only Congress can repeal or modify."

The executive order issued January 20, instructs the federal agencies charged with administering the law to "waive, defer, grant exemptions from, or delay the implementation of any provision" to minimize costs and regulatory burdens on individuals, states, and private entities.

The administration does have some latitude in implementing the law to meet its priorities, note Jost and Lazarus. However, it would have to do so through the Administrative Procedure Act, which requires agencies that wish to adopt or modify regulations affecting the public to publish proposed rules in the Federal Register and allow the public to comment before finalizing any rules.

That process usually takes a year, said University of Michigan law professor Nicholas Bagley, JD, who agreed with the editorial's overall assessment.

"Although ACA gives the administration a lot of flexibility," Bagley said, "[t]hat flexibility is not infinite. Changing ACA requires adherence to rigorous procedural formalities, and those will take a lot of time to navigate."

The administration has more flexibility when it comes to enforcement of a law's provisions, and some concern has been raised that the administration could simply cease enforcing provisions of the law. For example, it could cease enforcement of the requirement that individuals buy insurance or stop collecting related tax penalties. Such changes would not have to go through the notice and comment process, Bagley noted.

Yet, dramatic changes to the law's enforcement could "severely disrupt insurance markets" with both political and humanitarian consequences, note Jost and Lazarus. If healthier people decide to drop coverage, insurers would either raise rates or leave the market, increasing the number of uninsured by 18 million by 2018, according to a Congressional Budget Office analysis.

"Mulling such prospects, Republican strategists, both in and outside the administration, are reportedly already having second thoughts about precipitously sabotaging the ACA," the editorialists write.

In addition, efforts by the administration to intentionally sabotage the law are likely to run into legal challenges, they note.

Jost and Lazarus acknowledge that administrative changes to the law are likely, but say they will take time and cooperation with various units of government.

"Over time, the Trump administration will undoubtedly revoke or amend Obama administration rules or guidance," they write. "But major changes in the ACA's regulatory environment will require the cooperation of several federal agencies and often state regulators as well."

Bagley said much hinges on what Republicans in Congress decide to do. He said the administration is unlikely to stop enforcing the law if they can simply get Congress to repeal it, but both Congress and the Trump administration seem to be watching each other's next step.

For clinicians, this leaves a lot of uncertainty.

"The big take away is changes are coming, but they haven't come yet," Bagley said. "We are all in a waiting game at this point."