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Trump ACA order elicits wait-and-see approach in Mich.

Jonathan Oosting
Detroit News Lansing Bureau

Lansing – Michigan is taking a wait-and-see approach on a new executive order from President Donald Trump directing federal officials to “exercise all authority” to reduce any fiscal burden the Affordable Care Act is placing on states, individuals or health care companies.

The order, which Trump signed Friday shortly after his inauguration, is the first step in the new Republican president’s push to dismantle the Affordable Care Act, former President Barack Obama’s signature health care law that is commonly known as Obamacare.

But the order itself has “no independent legal effect,” said University of Michigan professor Nicholas Bagley, an Obamacare expert. Rather, “it is a set of marching orders to administration officials about what they ought to do with respect to the ACA.”

Trump’s pick to run the Department of Health and Human Services, Tom Price, has not yet completed the confirmation process, nor have other high-ranking officials who may make critical decisions about the health care law. Congress is exploring various paths to repeal and replace the law.

“You can’t just wave a magic wand and make the parts of the ACA you dislike go away,” Bagley said. “This executive order is just the first step in a long march.”

The executive order directs the federal health agency and other department heads to provide greater flexibility to states and cooperate with them in implementing the 2010 law, which has helped reduce national uninsured rates but not controlled health care costs as promoted.

The law also provided full federal funding to states that chose to expand Medicaid eligibility up to 133 percent of the federal poverty level, a step Republican Gov. Rick Snyder and the GOP controlled-state Legislature took in 2013 with the creation of the Healthy Michigan plan.

The Michigan Department of Health and Human Services is aware of Trump’s executive order, but “any comments on the future direction of health care coverage for Michigan residents, including Healthy Michigan Plan beneficiaries, would be premature at this point,” said spokeswoman Angela Minicuci.

The state has already secured two federal waivers needed to run the Healthy Michigan plan, which has 646,745 residents enrolled. Snyder touted the unique form of Medicaid expansion Friday in Washington, D.C., during a closed-door meeting with other Republican governors and GOP senators.

“We’re continuing to work with Gov. Snyder and our federal partners to convey the success of the Healthy Michigan Plan,” Minicuci said.

Device fee affected

The executive order directs federal department heads to waive or defer any cost, fee, tax or penalty on “makers of medical devices,” which could be a promising development for the Kalamazoo-based Stryker Corp.

The medical technology company says the 2.3 percent tax on most medical devices under the law cost it about $100 million in 2015. Stryker blamed the tax, in part, for layoffs it made in late 2012.

A Stryker spokesperson said Monday “it is too soon” to say what impact Trump’s executive order will have.

“However, we appreciate that the new administration has acknowledged the burden placed on manufacturers by the medical device excise tax contained in the ACA,” she said.

“We would prefer to direct this money towards jobs, innovation, clinical research and priorities that will create medical technology that positively impacts the lives of patients while helping us partner with hospitals to deliver cost-effective care.”

While the potential ramifications of the executive order remain unclear – one Republican U.S. senator called it “very confusing” – the administration has hinted it could be used to target a central part of the health care law.

Trump adviser Kellyanne Conway said Sunday the administration may stop enforcing the “individual mandate,” which requires most Americans to have health insurance or face a penalty.

“That is something that is really strangling a lot of Americans, to have to pay a penalty for not buying government-run health insurance," Conway said during an interview on ABC’s “This Week.”

Individual mandate targeted

Some experts say eliminating the individual mandate without making other changes to the Affordable Care Act could further undermine the law. Insurers who offer plans through Obamacare exchanges count on younger, healthier patients who are required to have coverage to offset costs for the sick or elderly.

Bagley said Trump could theoretically try to use the executive order to expand “hardship exemptions” for the individual mandate or move to eliminate the tax penalty for uninsured residents.

“Could President Trump instruct the Internal Revenue Service to change how it goes about enforcing the individual mandate? Yes,” Bagley said. “Would such a move be legal? It depends.”

Asked Monday whether Trump will eliminate the individual mandate, White House Press Secretary Sean Spicer said the president is working with congressional leaders on a repeal and replacement plan. But the president has a mandate to improve the health care law, he said.

Trump will “work with Congress and take executive action where necessary to implement a health care system that provides more people with health care, truly allows them to keep the doctor and plan they’re signing up for, lowers cost, creates more competition,” Spicer said.

As part of the broader discussion on health care reform, Trump has signaled support for converting the Medicaid program for low-income earners from an open-ended entitlement to a block grant program, a move that would likely cap long-term spending. But there have been hints he may protect Medicaid expansion, which Vice President Mike Pence adopted with certain reforms as governor of Indiana.

Conway reiterated the block grant position Sunday on NBC, saying block granting funding to the states would ensure “those who are closest to the people in need would be administering” the federally-funded program, which provides insurance to low-income and other vulnerable residents.

U.S. Rep. Sander Levin, D-Royal Oak, on Monday blasted the concept.

“History tells us that turning this program into a block grant, under the guise of increasing state flexibility, is just another way to cut Medicaid’s funding,” Levin said in a statement.

“This not only threatens states like Michigan that have increased Medicaid coverage under the Affordable Care Act, but it also jeopardizes the entire program’s long-time support for vulnerable populations. We cannot allow this assault on our values to prevail.”

joosting@detroitnews.com