The brief executive order is somewhat inconsistent. It declares that the policy of the Trump Administration is to ensure that the law is being efficiently implemented. However, it also commands federal agencies to minimize or undo all financial and regulatory burdens that the law imposes on “individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”
Imposing burdens to achieve its allegedly noble goals was the main strategy of the ACA. It is hard to see how disabling the law’s main strategy would ensure its efficient implementation. The order’s homage to the in-force status of the law may be intended as a defense to anticipated attacks on the executive order.
Employers are not listed as beneficiaries of this interim relief, but employers that sponsor and subsidize at least some health insurance plans for their employees should qualify for relief as “purchasers of health insurance.” However, the order’s express language may fall short of relieving large employers that do not purchase any health insurance from the ACA’s draconian “A” penalty (over $2,200 per year for each full-time employee).
The pre-ACA pattern of health insurance in staffing firms was that inside staff were offered subsidized conventional health insurance, while assigned employees were offered either no insurance or low-value insurance (at their own expense). It is not clear how thoroughly the executive order would protect, as “purchasers of health insurance,” staffing firms that cover only inside staff.
The ACA includes a ban on health insurance discrimination in favor of highly-compensated employees. That ban would be very disruptive to staffing firms by threatening the generous coverage enjoyed by internal staff. The law links the ban to new regulations, but none have yet been finalized for it. The executive order delays pending regulations that would impose new burdens on the protected parties, so it is likely that the long-overdue anti-discrimination regulations will never be completed and implemented.
Less obvious is whether the order would delay issuance of regulations governing employer appeals of “B” penalties that are imposed when employees obtain subsidies from ACA exchanges. The penalties themselves (over $3,300 per year per person) are already in place, so it could be argued that finalizing an appeals process would potentially relieve employers of burdens. But it could also be argued that penalties lacking an appeals process are unconstitutional and therefore already uncollectible, imposing no current burdens that require relief under the order.
One practical effect of the order might be to accelerate the already serious “death spiral” of individual health insurance plans. If the individual mandate is suspended or weakened under the order, individual plans are likely to lose healthy participants who were motivated to purchase coverage by the mandate’s penalties. This would drive up per capita claims and premium costs by further degrading the average health of the insured group.
Additional executive orders clarifying this first one would not be surprising.