I spent most of the day yesterday glued to the TV watching the inaugural festivities, commiserating alone to a dark communion signifying that, yes, this is a thing that is happening. Donald J. Trump is the forty-fifth President of the United States, and with him is a unified Republican government intent on reshaping the nation in their idealized image.
After another week of cabinet confirmation hearings highlighting the incredible ignorance, and dissonance, of those who will acquire the power to affect vast sections of society, the newly sworn president signed several executive orders to begin his first term. The first reported was a memo directing the Federal Housing Administration to suspend a decision by his predecessor to lower the cost of mortgage premiums for first-time and low-income buyers—a decidedly populist stand against reducing the burden of the non-rich. In addition, very similar to past incoming administrations, Trump also ordered a freeze on all pending federal regulations. Among other things this will allow him to effectively prevent several recent Energy Department standards that would’ve otherwise been implemented.
The most attention-getting EO was a late-reported move directing all relevant agencies to do everything possible within the law to limit the “burdens” of Obamacare. That is wide-ranging subject, affecting everything from Medicaid waivers to taxes, but what any of it means in practice is not exactly clear. Kaiser Family Foundation’s Larry Levitt says that the order itself doesn’t immediately change anything, “[b]ut it directs federal agencies to start taking steps to use their administrative authority to unwind the ACA in all sorts of ways. This is a signal that the Trump administration is not waiting for Congress to start making big changes.”
The more interesting question is what kind of regulatory flexibility this order can allow agencies to pursue concerning the various mandates of the law. The administration can’t unilaterally remove the requirement for people to have health insurance, for instance. Yet agencies could start looking the other way in what would amount to a indefinite delay for many. Nicholas Bagley, the most authoritative legal voice I know of on this law, expects “hardship exemptions to be expanded and IRS enforcement of the mandate to fall.” So it’s theoretically possible that the Trump administration could facilitate greater exemptions from the individual mandate in the interim before Congress can send him replacement bill.
What that does to the individual marketplaces is probably not healthy to contemplate. But let’s do it anyway! If vast swaths of potential enrollees abstain from signing up because they don’t (correctly or incorrectly) expect a tax penalty, or if insurance companies in these states even expect such behavior, then those markets would probably wither into nothingness before there’s a ready alternative. Premiums from those companies that didn’t withdraw from state and local marketplaces would certainly skyrocket, a self-fulfilling prophecy from the law’s opponents on death spirals destroying access to any affordable coverage. We’ve spent a lot of time these past ten days or so hearing from folks on the Republican side that such a scenario—as a result of repealing Obamacare without a replacement—is not acceptable. Will those same voices speak up on the possibility of Trump’s administration triggering a similar outcome?
We’ll see, I suppose, along with what I expect to be so many other profound changes. It’s the beginning of what will be very interesting times, indeed. Only 1,382 days to go.