President Donald Trump’s administration has reportedly prepared an executive order to end the Affordable Care Act’s (ACA) individual mandate. Trump may direct his departments to not enforce the mandate and could allow for more hardship exemptions that let people avoid fines for not having coverage.
Trump is reportedly not following through until he sees whether an individual mandate repeal winds up in major tax legislation. Republicans are trying to pass a tax bill by the end of the year, but they need to find ways to fund the $1.4 trillion tax cut over 10 years. One way is by repealing the individual mandate, which could save $416 billion over a decade.
House Speaker Paul Ryan (R-Wis.) said the individual mandate repeal isn’t part of the current tax bill, but leaders could add it to the legislation.
The Congressional Budget Office predicted earlier this year that about 15 million Americans would lose coverage over 10 years and premiums would increase 20% for individual plans without the individual mandate.
Scrapping the individual mandate would result in fewer people seeking health insurance and fewer government subsidies to help people buy coverage.
Repealing or seriously weakening the mandate would also result in healthier people leaving the insurance markets. Healthier members help offset the sickest members. Without that offset, the health insurance markets will become unbalanced, which would likely result in higher premiums and out-of-pocket costs for those who maintain coverage. Ending the individual mandate would also cause more payers to flee the ACA exchanges.
Increasingly frustrated by the Republican-led Congress not passing ACA repeal legislation this year, the president has taken other ways to chip away at the ACA law. One of his first executive orders in January requested the HHS “exercise all authority and discretion” to delay ACA provisions that impact members and states financially.
That order led to the CMS’ recent proposed rule that would allow states to bypass the ACA’s essential health benefits (EHBs) and let them decide on their own EHBs. It would also remove regulations that require payers in the ACA exchanges to pay a certain amount of premium dollars on claims. Right now, the ACA requires payers in the exchanges to uphold at least an 80% medical loss ratio. In the proposed rule, states would also have more influence over deciding what’s considered a qualifying health plan.
Trump additionally signed an executive order to allow small businesses and groups of people to come together to buy insurance as an association health plan. That order also expands short-term catastrophic plans, which offer barebones insurance coverage with high deductibles. Currently, only young people and those who meet hardship requirements can buy catastrophic plans in the exchanges. Trump’s order could open catastrophic plans for everyone.
In addition to the executive orders, the Trump administration has slashed the ACA advertising budget by 90% and cut the open enrollment period in half this year.
ACA opponent on Capitol Hill haven’t been as successful as the president in weakening the law. The House could add an individual mandate repeal to its tax bill, but the legislation may face impenetrable obstacles in the Senate. The Senate has already failed to pass ACA repeal legislation multiple times this year. Trying to wipe out a key plank to the ACA in the Senate likely won’t happen.
If Congress fails to repeal the individual mandate, the president may once again take aim at the ACA. The president’s previous executive orders and policies have wounded the ACA, but harming the individual mandate could be the final trump card that topples the ACA exchanges.