President Donald Trump’s first official act in office was to sign an executive order declaring it the policy of his Administration to seek prompt repeal of the Affordable Care Act (ACA) – but in the meantime, he calls for executive branch action “to minimize the unwarranted economic and regulatory burdens of the Act.” Specifically, Trump’s order provides that “[t]o the maximum extent permitted by law,” executive departments and agencies must:

exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act 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.

The order likewise instructs federal agencies to use their discretion, to the extent permitted by law, to provide greater flexibility to States and cooperate with them in implementing health care programs. Furthermore, agencies are directed to “encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.”

Significant questions remain regarding the extent to which the Trump Administration will focus on regulatory and subregulatory steps to roll back Obama Administration policies in light of concurrent legislative efforts to “repeal and replace” the ACA. While the new Administration will presumably coordinate closely with Congressional leaders on such legislation, executive branch efforts could provide a mechanism to demonstrate progress more quickly than the legislative timetable will allow. The Obama Administration itself exercised broad administrative discretion at the regulatory and subregulatory levels to implement the ACA, demonstrating that the scope of possible executive branch changes to the program is fairly expansive. To the extent that policy changes would necessitate regulatory change, the executive order directs agencies to comply with the Administrative Procedure Act and other applicable statutes.

The full reach of the executive order may not be apparent for some time, particularly since the Trump Administration’s department and agency heads are still not in place. In the meantime, the health industry and insurers can be expected to closely examine both opportunities and risks from this second look at ACA implementation.