Trump Takes Action against the ACA

October 2017

On October 12, President Trump signed an Executive Order purporting to “promot[e] competition in [health care] markets and limit[] excessive consolidation throughout the [health care] system.” The order directs federal agencies with health care oversight authority to propose new regulations or revise existing guidance to increase availability of or access to three “alternatives to expensive, mandate-laden [Affordable Care Act (ACA)] insurance.” In particular, it instructs agencies to consider rules that would extend the coverage periods for short-term, limited-duration insurance (STLDI), expand the availability of association health plans (AHPs), and increase the “usability” of health reimbursement arrangements (HRAs). Although the order itself encourages changes that could significantly affect the health insurance industry, an immediate impact appears unlikely because the agencies directed to consider new or revised regulations will be required to comply with customary notice and comment periods before any new or revised rules could take effect.

That same day, the Trump administration also announced that the federal government would no longer make cost-sharing reduction payments to insurance companies. These payments, which are guaranteed under the ACA, are designed to help lower out-of-pocket medical expenses for low-income consumers. Because insurers are still required to provide lower out-of-pocket costs for low-income consumers, the lack of funding could result in higher premiums. In response to the announcement, attorneys general from 18 states and the District of Columbia filed a lawsuit in the U.S. District Court for the North District of California, against the President, the Treasury Department, and the Department of Health and Human Services. The suit requested that the federal government be forced to continue making cost-sharing reduction payments in accordance with the ACA. On October 18, the attorneys general filed a motion for an emergency temporary restraining order to prevent the Trump administration from cutting off these cost-sharing payments. On October 25, the court issued an order denying the motion for an emergency injunction.  In the order the court stated that the ACA “[s]ix years after its enactment in 2010 . . .  is well on its way to achieving [its] purpose” of “provid[ing] health coverage for the millions of people who don't get it through their job.”  It, however, could not rule in favor of the states’ motion for an emergency injunction because it was not convinced that Congress had in fact appropriated funding for the cost-sharing reduction payments.  The court, nevertheless, acknowledged that it was “a close and complicated question” and ordered that a conference take place in November to set a schedule for full adjudication of the case.