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Trump’s Executive Order On Obamacare Means Everything And Does Nothing

As promised, on his first day in office, President Donald Trump took steps to undo the Affordable Care Act, former President Obama’s signature health care law. In one of his first executive orders, Trump pushed the secretary of Health and Human Services (HHS) and other federal agencies to begin weakening the law. The meaning of the executive order is both subtle and bold; on the one hand, it does very little because it doesn’t grant the administration any powers that it didn’t already have. On the other hand, it signals to the public that change is coming and lets employees at HHS know that they’d better be part of that change.

Section 2 of the order instructs the secretary of HHS to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay” parts of the law that would place a fiscal burden on states, individuals or health-care providers. Most of the provisions in the ACA can’t just be changed by HHS or the president; they require action from Congress or a lengthy period involving public comment. Which is why it’s reasonable to assume this line is targeted at the things HHS can change, like the individual mandate. The individual mandate, which requires most people to have health insurance or face a tax penalty, has always been the most contentious part of the law.

At least, that’s how the mandate was interpreted during the Obama administration. In reality, the secretary of HHS can grant hardship exemptions to the mandate as she sees fit. Under the Obama administration, the hardship exemptions were granted to people who earned below 138 percent of the federal poverty limit and lived in states that didn’t expand Medicaid, or experienced a handful of other life circumstances, including homelessness or domestic violence.

But there’s nothing preventing the HHS secretary from granting hardship exemptions to everyone who doesn’t have insurance, rendering the mandate meaningless. If he’s confirmed, Rep. Tom Price, Trump’s pick to lead HHS, could have granted blanket hardship exemptions before the executive order was issued, but in case there was any question, the folks at HHS now have their bosses’ itemized list of priorities.

Granting broad exemptions without other changes could create chaos in the insurance marketplaces created by the ACA that mainly cover people without employer-sponsored coverage. Insurance companies rely on a mix of patients — healthy, sick, young, old — to balance out the money they gain through premiums and the money they dole out for health care. Without an individual mandate, younger, healthier people will very likely leave the marketplace, wreaking havoc within insurance plans and sending premiums rocketing up for those left behind. “This is a very sweeping order that could have huge ramifications for the ACA,” Larry Levitt, a senior vice president of the Kaiser Family Foundation, wrote in an email. “Potentially the biggest step implied by this order would be granting wide scale hardship exemptions from the individual mandate, which could create chaos in the individual insurance market.”

The Affordable Care Act also mandates that insurance plans cover a set of services without charging for them (beyond monthly insurance premiums), but it’s up to HHS to lay out the specifics. For example, that part of the ACA that requires contraceptives be provided to insured women free of co-pays or deductibles? That’s not written in the law; it was part of how the law was interpreted by the Obama administration. By one estimate, that interpretation saved women $1.4 billion in out-of-pocket spending from 2012 to 2015. Another estimate found savings of $483 million in a single year. The contraceptive mandate has been an object of ire and the subject of a Supreme Court case, and is likely to be one of the first things to go.

There are other important signals in the short executive order. It says HHS should “encourage the development of a free and open market in interstate commerce” and “provide greater flexibility to States,” suggesting that Trump will push HHS to grant more flexibility to states in how they implement the law.

It was no secret before Trump signed the executive order that he wanted the Affordable Care Act repealed, and all of these changes were possible before it was signed. But now Trump has made his intentions clear, with one of his first acts as president: The Department of Health and Human Services, “to the maximum extent permitted by law,” should get to dismantling.

Anna Maria Barry-Jester is a senior reporter at Kaiser Health News and California Healthline, and formerly a reporter for FiveThirtyEight.