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Mandates No More! Executive Action Sets Stage for Major Healthcare Reform

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Mandates No More! Executive Action Sets Stage for Major Healthcare Reform

In his very first executive action, newly-inaugurated President Trump chose to tackle one of the most unpopular policies on the books today – the Affordable Care Act, also known as Obamacare. This specific executive order directed executive departments and agencies to

“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.”

To simplify that down to one sentence, the purpose of the executive order is to direct presidential appointees to do all they can to minimize the harmful effects of the Affordable Care Act. For agencies, this could take the form of writing new regulations, or utilizing discretion when legally permissible. The order itself did not direct any particular specific actions, and has no immediate effect, but it can be seen as a strong signal that the new administration intends to fight this failing health care law. It sets the stage for giving states greater flexibility in health care programs, and for selling insurance across state lines – both free market health care reforms that could go a long way towards reducing insurance costs and increasing quality of health care.

The biggest step that could be implied from this order would be the reconfiguring of the current individual mandate, one of the least popular elements of Obamacare. Currently, Americans are required to obtain coverage from a health insurance policy which meets the minimum standards under the ACA, or else they must pay an IRS tax penalty, which will be a household average of $969 in 2016, up 47% from 2015’s average of $661. The only exception to this rule is if you qualify for a “hardship exemption”, which is vaguely defined as financial situations and other circumstances that keep you from getting health insurance. The new administration could try to mitigate the harm imposed by the individual mandate by loosening the arbitrary criteria that would qualify one for a hardship exemption. Fewer people would have to pay the penalty, which would minimize the “burden on individuals” described in the executive order.

This loosening of enforcement would be especially beneficial to Hispanics, who tend to be young and healthy, and who see no reason to sign up for a healthcare plan that they do not want or need. Many states have seen premiums rise by double digits in past years, and Hispanics are being burdened by the mandate to incur this rising cost – relief would be a welcome development.

All of these actions will help shift the national discussion to one focused on free-market healthcare policies, and this executive order is an important first step. However, though it is good to see a positive statement of intention from the new administration, this executive order alone will not be enough to dismantle the harmful effects of Obamacare. A policy change of this scale will require legislation to pass through Congress, and will require bipartisan cooperation to both repeal Obamacare, as well as to find viable replacements. Congressional leaders on both sides of the aisle must work together to create new health care laws that benefits all Americans, without imposing restrictive and costly mandates.

 

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Highlights

Free-market health care reforms can go a long way towards reducing insurance costs and increasing quality of health care.

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Hispanics are being burdened by the mandate to incur this rising cost – relief would be a welcome development.

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Congressional leaders on both sides of the aisle must work together to create new health care laws that benefits all Americans.

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