In an executive order signed on his first day in office, President Trump stated his support for a “prompt repeal” of the Affordable Care Act (ACA). This alone is noteworthy: the days of rhetorical differences between the president and his congressional allies appear over. That said, this executive order itself does not change policy (it only directs subsequent policy actions), and no executive order can repeal a law. The executive action cannot, for example, set lower deductibles for Americans, or rescind taxes on the health industry; such changes require legislation. It can, however, shift the balance of protections and responsibilities within the law – potentially, at the cost of people who need health care.
To review, the ACA tackled a number of challenges in our health care system beyond expanding access for the uninsured and people with pre-existing conditions. For example, it ensured coverage of prevention and catastrophic costs in all private insurance; reoriented Medicare’s payments from volume to value; authorized aggressive actions against health care fraud and abuse; and significantly expanded community clinic sites and the health care workforce.
Many of these ACA provisions required rulemaking, which allowed for engagement with the public and experts, a dynamic approach to implementation, and provision of answers to the frontline questions about how the law works. Having been involved in virtually all of these regulations, I have a first-hand appreciation for the extra work that it required to be transparent in our decision making, responsive to public comments, and willing to change guidance in light of experience and input. And, throughout it all, we were directed to put patients at the center of our deliberations – especially since their voices were less often represented in the ordinary course of business.
The new executive order places a different emphasis in approaching ACA regulations. It directs agencies to
“waive, defer, grant exemptions from, or delay the implementation of any provision … 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 be clear, the idea of preventing unnecessary regulatory burden is not partisan. The Obama Administration launched a regulatory look-back initiative to eliminate outdated or inefficient regulations, leading to an estimated $22 billion in savings. And in implementing the ACA, we strove to meet this goal as well. Yet, more often than not, one stakeholder’s “burden” is another stakeholder’s benefit.
To illustrate what is at stake in subsequent actions pursuant to the executive order, consider four different categories of stakeholders and how providing them with regulatory relief could shift burden to American families. Trade-offs also could occur within stakeholder groups. For example, broadening the exemptions from individual shared responsibility would eliminate fees on uninsured people who can afford coverage while raising premiums on people who maintain their insurance in sickness and in health. The policies below are chosen simply to explain the types of choices to expect.
Health Insurance Companies versus People with Opioid Addiction
In an early January visit to Capitol Hill, Vice President Pence was reported to describe a “‘two-track’ approach to chip away at the ACA through executive powers and legislation,” including stripping down benefits that people with private insurance receive.
The ACA requires most individual and small group market health plans to cover ten statutory categories of essential health benefits, extends mental health and substance use disorder parity to these markets, and prohibits lifetime and annual dollar limits on coverage of these benefits in all health plans. Given the complexity of setting benefit standards, the Obama Administration engaged with multiple stakeholders and ultimately empowered states in this decisionmaking. It commissioned the nonpartisan Institute of Medicine to develop a paper on how to do so; issued its own white paper; used the formal rulemaking process to seek input on proposals; and refined those rules in subsequent rulemaking and sub-regulatory guidance.
The final rules and subsequent guidance ensure – to pull one example – that issuers must cover medication-assisted treatment for people with opioid addiction. Because of this set of actions, privately insured families who purchase insurance on their own are guaranteed coverage for treatment for a son or daughter suffering from addiction – no matter where they live or what health plan they choose. Without this guidance, as it was before the ACA, insurance companies would mostly likely not cover this type of treatment for fear that offering it would attract as enrollees some of the 2 million Americans with opioid addiction whose health care costs are high. Regulatory relief for insurers in this case could come at the cost of a reduction in the treatment of opioid addiction, and the possibility of an increase in overdoses.
Religious Employers versus Women Seeking Contraception
Another likely target for the incoming administration is the so-called contraception mandate. Speaker Ryan has repeatedly claimed this policy infringes upon religious liberty, even inviting objecting employers as his guests for President Obama’s last state of the union address.
The ACA requires that most private health plans cover women’s preventive services, which independent, scientific panels recommend, including contraceptive services. The implementing regulations exempt religious organizations, such as churches, and provide an accommodation for other employers, such as Catholic hospitals. The accommodation ensures that women with health benefits get contraception coverage while preventing their employers from having to pay, arrange, refer, or contract for such coverage.
After several rounds of rulemaking and modifications, reflecting input from hundreds of thousands of public comments, the number of religious employers that objected to this policy was greatly reduced, yet the Supreme Court directed further reconsideration of the rules in 2016. In response, the Obama Administration concluded, after reviewing an additional 54,000 comments, that it would not change the regulations, since doing so would neither satisfy objecting religious employers without additional changes nor maintain the same assurances of full and equal health coverage for women.
Should the Trump administration change these regulations and exempt additional organizations from the contraception coverage requirement, tens of thousands of women would likely face cost barriers to contraceptive services, leading to increased risk of unintended pregnancy, higher health care costs, and worse health outcomes for mothers and newborns.
Drug Companies and Nursing Homes versus Seniors with Diabetes and Heart Disease
The nominee to be secretary of the Department of Health and Human Services (DHHS), Tom Price, has been a vocal critic of the work of the Centers for Medicare & Medicaid (CMS) Innovation Center for, among other concerns, exceeding its authority.
The Innovation Center was created by the ACA to test ways of paying for health care. If the CMS Actuary certifies a model as lowering health care costs while maintaining quality, the model may be adopted by Medicare. Last November, DHHS did just that, finalizing a rule that approved for coverage the Diabetes Prevention Program, a community-based intervention focused on healthy eating and exercise, which saves Medicare an estimated $2,650 per enrollee. The pharmaceutical industry, which benefits from treating rather than preventing diabetes, criticized the rule, claiming it was based on “preliminary evidence.” The program does not start until 2018, and could be rolled back through rulemaking to “relieve burden” on the pharmaceutical industry by allowing it to continue to make higher profits. About one in four Medicare beneficiaries has diabetes, which costs the program an estimated $42 billion in 2016.
Additionally, in December, the Innovation Center finalized a rule to test bundled payments for treatment of heart attacks and bypass surgeries, and extra payments to promote cardiac rehabilitation services. Creating incentives for hospitals to keep patients healthy when they are discharged likely lowers entry into nursing homes – which elicited a negative reaction from the nursing home industry. The final rule’s effective date was moved from February 18 to March 20, 2017 under the Trump Administration’s regulatory freeze memorandum and will be re-reviewed. Heart disease is the leading cause of death in the United States and cost Medicare $96 billion in 2012. Not letting these innovative payment models go forward could help “relieve burden” on nursing homes by keeping their occupancy higher, but this would hurt patients who would benefit from the improved quality of care and outcomes that these new payment models may offer.
States versus Low-Income Adults
While Republican governors have expressed concern about a rollback of ACA’s coverage expansion, they also have stated the desire for additional flexibility in a recent meeting with Republican senators. The executive order in several places discusses the importance of state flexibility regarding health care programs, and the nominee to run CMS, Seema Verna, has made a career of consulting for states to create flexibility by securing Medicaid demonstration waivers.
Experts and policy makers alike support state flexibility when it means adapting payment models to local health systems, integrating behavioral health and public health based on local circumstances, and engaging communities in promoting the health of Medicaid enrollees. Innovations like these provide states with ways to seek high-value health care for their Medicaid enrollees, meeting the dual goals of lower costs and higher quality.
However, such support generally switches to opposition when state flexibility means nothing more than shifting costs to low-income people through reduced benefits or higher premiums or copayments. The Obama Administration approved a number of waivers that allowed states to charge premiums and copayments within a certain range, but only after indicating it would deny higher amounts, because they would harm the people the Medicaid program is intended to serve. According to one analysis, people with incomes below 60 percent of the federal poverty line pay more for necessities than they receive in income, making imposition of substantial premiums or copayments unaffordable. Increasing state flexibility in this manner could lower state costs, but only by lowering enrollment or enrollees’ ability to pay for care at the point of service — something that would not meet President Trump’s goal of “better health care, much better, for less money.”
Administrative Actions as Tools for Improvement
In today’s world, full of big data and rapid feedback, having administrative authority to implement statutory goals is more important than ever, allowing for nimble adaptation and response to public input. For example, it has allowed for timely and evidence-based adjustments to the risk-adjustment program for the Health Insurance Marketplace. It is building the foundation of the reformed Medicare physician payment system. And, it even allows states to test their own “replacement plans” for the ACA, so long as they cover as many people with as comprehensive and affordable care without increasing the federal deficit. (Alaska has a pending State Innovation Waiver, for example, that would allow it to create a federally supported reinsurance program to lower premiums while preserving benefits for consumers.) There is potential to use administrative action to, for example, lessen the extent of “surprise bills” that consumers pay for in-network hospital care, or test Medicare negotiation for Part D drugs.
But administrative actions should not be used to sabotage the law, reverse progress in our health system’s performance, or shift costs to patients as a means of reducing them for health care industries or states. Among the many positive results since the law took effect, 20 million adults gained health insurance, over 130 million people with existing private coverage have been guaranteed preventive services coverage and no lifetime or annual coverage limits, 11 million people with Medicare have paid lower prices for prescription drugs, and debt among people gaining Medicaid coverage dropped by $600-$1,000 per person.
The implementation of this ACA executive order should be measured against the same yardstick: Does it cover as many people with as affordable and as high-quality coverage? Does it improve people’s health, and outcomes? If it doesn’t, it is not reducing burden, but increasing it. And the burden goes far beyond cost. Lives hang in the balance.