Trump may stop enforcing the individual mandate, a hugely damaging move for Obamacare

In an interview with ABC’s George Stephanopoulos that seems to have flown a bit under the radar, Trump adviser Kellyanne Conway said the president may stop enforcing Obamacare’s individual mandate that requires nearly all Americans to carry health coverage.

Here’s the exchange:

STEPHANOPOULOS: I do want to get to a question on Obamacare. You had the president’s executive order signed on [Friday]. And a lot of people were trying to figure on Friday, a lot of people trying to figure out what exactly does that mean?

We know that on its own, the Obama administration chose to stop enforcing the employer mandate. Will President Trump stop enforcing the individual mandate?

CONWAY: Well, when president — what President Trump is doing is, he wants to get rid of that Obamacare penalty almost immediately, because that is something that is really strangling a lot of Americans to have to pay a penalty for not buying…

STEPHANOPOULOS: So, he’ll stop enforcing that mandate?

CONWAY: He may.

But look, we want to make very clear to everyone, that those who are relying upon coverage will not lose it.

Trump did issue a new executive order Friday night saying that his administration would aim to “waive, defer, grant exemptions from, or delay” any possible health law taxes or penalties. And while that executive order didn’t give him any new powers, it did set the tone for moving quickly to dismantle the health care law.

The big question right now is what Trump can legally do to halt the individual mandate — and, if opponents feel he is acting illegally, what recourse do they have. Suspending the individual mandate indefinitely would seem to be something Trump can’t do by himself: If he wants to wipe it from the books, he’d need to go back to Congress and ask them to repeal it.

That being said, the Obama administration did set some precedent here that might not be helpful for the Affordable Care Act. In the summer of 2013, the Obama administration moved with executive authority to delay the implementation of the law’s mandate that all large businesses offer coverage. The mandate ultimately did come into effect in 2016.

Health law expert Nicholas Bagley wrote at the time about the “troubling precedent” that this unilateral action could set for a future administration less sympathetic to the law:

The delays nonetheless set a troubling precedent. They are unlikely to be challenged in court — no one has standing to sue over the employer-mandate delays, and no insurer has thought it worthwhile to challenge the “like it, keep it” fix. But a future administration that is less sympathetic to the ACA could invoke the delays as precedent for declining to enforce other provisions that it dislikes, including provisions that are essential to the proper functioning of the law. The delays could therefore undermine the very statute they were meant to protect — and perhaps imperil the ACA’s effort to extend coverage to tens of millions of people.

To be clear: Halting implementation of the individual mandate could cause really significant disruption in some state marketplaces, encouraging both healthy individuals and health insurers to quit the marketplace. This short video explains why the mandate is so important, and what would happen without it.

If the Trump administration did decide to stop enforcing the mandate, the action would near certainly face legal challenge, but a court case might have to wait until a plaintiff could prove actual harm from the action. It would likely throw insurance markets into chaos before a court could weigh in on the matter.

“If the IRS ‘delays’ the individual mandate, the insurance markets in many states could go into a tailspin,” Bagley writes in a newer piece. “Rates for 2018 will skyrocket and some insurers could fold. In addition, delaying the mandate would preempt any debate in Congress about whether to keep the mandate in place during a transition period to a yet-to-be-disclosed replacement.”