On January 20, 2017, President Trump signed an Executive Order entitled “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal.”  Executive Orders are legally binding statements issued by the president that direct federal agencies and officials in their execution of congressionally established laws or policies.  The Order provides broad guidance and direction to executive agencies as they implement the Affordable Care Act and other unspecified laws that regulate healthcare and health insurance.  As Congress sets out to “repeal and replace” the ACA, this Order marks the first step the new administration has taken to roll back the law.  The text of the Executive Order may be found here. 

The text of the Executive Order sets forth five directives to executive agencies regarding the Affordable Care Act, health insurance generally and healthcare programs. 

• Section 1:  Announces that it is the policy of the administration to seek repeal of the ACA.  Pending repeal, the Order directs every executive branch department to ensure that the ACA is being efficiently implemented and to “take all actions . . . to minimize the unwarranted economic and regulatory burdens of the Act.” 
• Section 2: Directs the Secretary of HHS and the heads of all departments that have “authorities and responsibilities” under the ACA to exercise their legal authority and discretion to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act” that imposes a “fiscal burden” on States or “a cost, fee, penalty or regulatory burden” on families, providers, insurers, patients, insurance consumers, and the manufacturers of medical devices, products, or medications. 
• Section 3: Directs the Secretary of HHS and other executive agencies with “authorities and responsibilities” under the ACA to exercise all legal authority and discretion to provide States flexibility in implementing healthcare programs.
• Section 4: Directs every department head with “responsibilities relating to healthcare or healthcare insurance,” to “encourage the development of a free and open market in interstate commerce” for the offering of health insurance.
• Section 5: Directs the heads of all agencies to comply with the Administrative Procedure Act in carrying out the directives of the Executive Order through notice and comment rulemaking wherever required. 

The Executive Order does not itself target specific provisions of the ACA or specific regulations that are to be delayed or, if possible, repealed.  Rather, Section 2 of the Executive Order can be read as a slow-down order: it directs all relevant federal agencies to identify those provisions of the ACA that could be delayed in implementation, or that could be waived or deferred, and to grant such delays, deferrals, and exemptions that are legally permissible under current law.  The Order is unspecific as to how agencies would delay implementation, and it is possible that federal agencies could seek to delay implementation by reversing or revising current regulations.  While the Order limits federal agency power only to provisions of the ACA that create “fiscal burdens” or are a “cost, fee, penalty or regulatory burden” on individuals, providers, insurers, and manufacturers, the Order contains no standards for assessing such burdens and, therefore, grants the agencies broad discretion in deciding which provisions of the ACA to target for delay, waiver, or deferral. 

Two other provisions of the Order, Sections 3 and 4, appear to be specific references to other policies promoted by President Trump during the 2016 campaign and supported by Republican leadership.  Section 3 directs agencies to grant States flexibility in implementing healthcare programs and appears to be at least in part a reference to the Secretary’s authority under the Social Security Act and other authorities to grant waivers of federal Medicaid law in order to allow for demonstrations or experimentation in Medicaid coverage and financing.  While the Secretary has broad waiver authority to allow for such experimentation, current law constrains this authority and requires a detailed evaluation and review process for Medicaid waivers.  The CMS Administrator designee, Seema Verma, negotiated one such waiver for the State of Indiana as an alternative for accepting Medicaid expansion under the ACA. 

Section 4, which directs department heads to encourage the development of a “free and open market” for the offering of health insurance, appears to be a reference to the president’s campaign pledge to allow health insurers to sell healthcare policies across state lines.  It is unclear to what extent current federal law supports such an interstate market and many experts have stated that federal legislation may be required. 

Section 5 of the Order requires federal agencies to follow the notice and comment procedures of the Administrative Procedure Act in carrying out the Executive Order.  This provision appears to empower federal agencies to consider reversal of existing regulations, promulgated during the Obama administration, in order to carry out the commands of the Executive Order to delay, defer, or waive implementation of the ACA to the extent permitted by law.