President Trump today released an Executive Order that asked 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.
Could Trump really unravel Obamacare? Certainly. The first method for doing this would be to end the individual mandate. Without the individual mandate, healthy individuals will likely stop buying insurance as their estimated benefits would be much lower than the cost of insurance. As healthy people leave the market, premiums rise further. This premium rise causes the moderately healthy now to leave the market, and premiums rise even higher. The process can perpetuate itself into an adverse selection death spiral.
Margot Sanger-Katz notes another method Trump could use to unravel Obamacare.
The easiest way for the Trump administration to undermine the health law would be to stop defending a lawsuit brought by the House of Representatives. That suit said that the Obama administration lacked the authority to pay certain Obamacare subsidies. A lower court ruled for the House, meaning that by simply withdrawing from the appeal, the Trump administration could start a process to eliminate those subsidies and cause a collapse of the insurance market. Mr. Trump’s order said nothing about that policy choice.
Without subsidies, the adverse selection death spiral would be even more rapid and the market likely would quickly dissolve.
Is this what Trump wants? Does he propose replacing Obamacare with something else? There are still many, many questions left unanswered. What we do know, is that U.S. health care policy is in the process of some significant changes.