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Trump’s executive order on Obamacare, explained by two health policy experts

Parade Celebrates Presidential Inauguration Of Donald Trump Photo by Kevin Dietsch - Pool/Getty Images

Shortly after the end of his inaugural parade, President Donald Trump issued his first executive order: instructions for the federal government to dismantle the Affordable Care Act “to the maximum extent permitted by law.”

The executive order is a powerful political statement about the health care law, one that directs agencies to “waive, defer, grant exemptions from, or delay” any taxes or penalties they possibly can. The order doesn’t give Trump any new powers, but does suggest that he wants to move quickly on dismantling major parts of the health overhaul.

“This order doesn't in and of itself do anything tangible,” says Larry Levitt, vice president at the Kaiser Family Foundation. “But 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.”

It’s the clearest statement so far of Trump’s specific priorities on the health care law. In recent weeks, Trump has said he wants to improve health coverage for all Americans, but he’s been vague about what that means. This document suggests he may take aim at a piece of the law long loathed by Republicans: the individual mandate.

In particular, the executive order directs agencies to use any authorities within the bounds of the law to dismantle “any provision ... that would impose a fiscal burden on any State, or a cost, fee, tax, penalty, or regulatory burden on an individual.”

The mandate requires all Americans to have health care coverage, and it is critical to making the law work as a whole. It’s arguable that Trump could stop enforcing the individual mandate without an act of Congress — just as Barack Obama did in 2014 with the law’s employer mandate.

But this executive action on its own does not unravel the mandate, or any other part of Obamacare for that matter. Instead, it sets up a long, drawn-out process to change the law’s rules — an unwinding process that takes time. And there are still major limits to how much Trump can do before Congress acts.

“Trump is going to have to comply with law, and that doesn’t allow him to repeal the Affordable Care Act unilaterally,” health law expert Tim Jost, a law professor at Washington and Lee College, says.

From this perspective, as much as it’s a political scream, it’s perhaps more of a practical whisper (at least for now).

Jost walked me through two especially important things to notice about the Trump executive order:

1) Most of the paragraphs in the executive order start with seven important words: “to the maximum extent permitted by law”

These words recognize that the only actions federal agencies can take are those that don’t conflict with the Affordable Care Act. Trump can take steps to revise the rules and regulations that the Obama administration wrote to explain how the law ought to work.

For example, this executive order says that agencies should try to “waive” any costs or regulatory burdens on “makers of medical devices, products, or medications.” At first glance, this would seem like an order to repeal the health care law’s medical devices tax.

But Trump can’t do that through executive order — the medical device tax is written into the law that Congress passed. He might be able to tweak the tax. He might be able to delay collection of the fine, for example, as the Obama administration did with the employer mandate. But he can’t kill it outright without Congress.

“What he is saying here is that our general policy is going to be to deregulate,” Jost says. “He’s saying, ‘I do not want more regulations; we should grant waivers where we can, and give more authority to the states.’”

2) Trump notes he’ll follow the Administrative Procedure Act for new rules. That’s important.

Section 5 of Trump’s executive order looks a bit dull, but it jumped out at Jost immediately. Here’s what it says:

To the extent that carrying out the directives in this order would require revision of regulations issued through notice-and-comment rulemaking, the heads of agencies shall comply with the Administrative Procedure Act.

What this means is that Trump can’t just start putting out new rules and regulations tonight. Instead, he’ll have to follow the Administrative Procedure Act, a law from 1946 that governs the somewhat laborious process of putting rules into place. This typically involves issuing draft rules, accepting comments, sometimes holding public hearings, and ultimately issuing a final rule that takes all the feedback into effect.

In other words: Rulemaking under the Administrative Procedure Act takes time. And a lot of important Obamacare regulations that govern how the law works are those that went through notice-and-comment rulemaking the first time around. This includes, for example, the rules that govern the individual mandate. It took more than a year to move from the first draft of the individual mandate regulation to the final version.

The Trump administration has full authority to write new rules around the individual mandate — to give those without coverage more exemptions, for example — but before those rules go into effect, they’ll need to go through a similar process.

Jost is generally a supporter of the Affordable Care Act. And based on these two reasons he outlined for me, this new executive order didn’t cause him much panic.

“I was worried [Trump] would do something unpredictable, but this is what I expected,” he says. “I think he’s been advised that he can’t repeal the Affordable Care Act through executive action, and now we see where this goes.”

Watch: Republicans have one major problem on Obamacare

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