WASHINGTON — In his first executive order after taking office, President Donald Trump ordered federal agencies to waive or delay any provisions of the Affordable Care Act they consider onerous to individuals, states or insurers.
The order contained few specifics, however, and raised more questions about the fate and direction of the country’s health care system than it answered.
The lack of specifics in Trump’s directive, combined with ambiguous public statements by members of his leadership team, has heightened uncertainty among stakeholders about what lies ahead on the health care front. One likely result, though, appears to be the elimination of the ACA’s central requirement that most individuals must buy insurance or pay a tax penalty.
Appearing recently on ABC News’ “This Week,” White House advisor Kellyanne Conway stated that President Trump “wants to get rid of that Obamacare penalty almost immediately.” However, when asked whether that meant the administration would no longer enforce the individual penalty, she replied equivocally: “He may. But look, we want to make very clear to everyone that those who are relying upon coverage will not lose it.”
In fact, as The New York Times pointed out, the executive order does not repeal the ACA, nor does it eliminate or reduce coverage or funding for coverage. It does, however, seem to give federal officials the scope to neutralize penalties for those who forego insurance coverage, possibly through authorizing broad exemptions. It may also allow insurers to offer plans with fewer benefits and to sell policies across state lines.
The insurance industry has reportedly been uneasy about a partial repeal of the ACA, because its requirement that healthy individuals obtain insurance is essential to another requirement that insurers cover people with preexisting medical conditions. Without a penalty for going without insurance, the industry contends, healthy people will drop their coverage, leaving the population of the insured dominated by sick people who are unprofitable, thus driving up premiums and making health care less affordable.
Meanwhile, Republicans in the Senate unveiled two different options for repealing the ACA. Sens. Susan Collins (R., Maine) and Bill Cassidy (R., La.) unveiled a bill that would allow states to retain or discard Obamacare. Passage of the bill, called The Patient Freedom Act of 2017, would essentially shift the decision to repeal to the states, allowing them to drop several provisions of Title I of the ACA, including the individual coverage requirement.
The bill would require that states that eliminate the ACA would have to maintain some requirements that it imposes on insurers, namely, that they allow parents to cover children as dependents up to the age of 26, pay claims without annual or lifetime limits and provide coverage to people with preexisting conditions. States that opt out of Obamacare would be able to collect federal funds that would have been allocated to tax credits and the expansion of Medicaid eligibility, and use the money instead to provide other health care services to residents.
Under the Patient Freedom Act, previously uninsured people, including those who could not obtain coverage from an employer or from Medicare, would automatically be enrolled in a standard health plan featuring a health savings account containing an undisclosed amount of funds to pay for health care. Individuals who earn up to $90,000 per year or married couples earning up to $150,000 would also be eligible.
Neither the standard plan nor the plans purchased through the act would have to provide all the coverage offered by ACA, but many elements would be retained. For example, many preventive services, such as free colonoscopies, mammograms, immunizations, annual checkups, birth control and various tests for disease, would continue to be covered. Additionally, mental health and substance use disorder services would be included, as well as a prescription drug benefit.
The Collins-Cassidy bill consequently would relieve Congress of some major decisions. The two senators argue that theirs is the only approach that can secure support from a handful of Democrats that will be needed to secure the 60 votes required to pass complete replacement legislation. The Republicans hold a 52-48 majority in the Senate.
“I would say what we’re doing is moving the locus of repeal to state governments,” Cassidy said. “On the one hand, that is philosophically consistent with where Republicans are. States should have the right to choose.”
Senate minority leader Chuck Schumer (D., N.Y.) quickly dismissed the bill, saying, “Ultimately, this proposal is an empty facade that would create chaos — not care — for millions of Americans.”
Moreover, it is not clear what level of support the bill will receive from Republicans in either the Senate or the House. Just days after the Collins-Cassidy bill was introduced, Sen. Rand Paul (R., Ky.) revealed his own very different replacement bill, called the Obamacare Replacement Act.
“There is no excuse for waiting to craft an alternative until after we repeal Obamacare, and the Obamacare Replacement Act charts a new path forward that will insure the most people possible at the lowest price,” Paul said in a statement.
Paul’s bill abolishes several elements of the ACA, including the individual coverage mandate and minimum standards for services that an insurance plan must cover, which would free insurance companies to offer cheaper policies with weaker coverage, and it also eliminates some protection for patients with preexisting conditions. It would also end the exclusion of employer-sponsored health plans from taxation.
Instead, the Obamacare Replacement Act offers a universal tax deduction for health insurance, and a tax credit of up to $5,000 per person to use as part of a Health Savings Account to pay for medical care.