News: CJ Exclusives

Trump’s first-day actions make Medicaid expansion less likely

Executive order envisions repeal of Obamacare; regulatory freeze could block expansion even if it moved forward

President Donald Trump at a 2016 rally in Kenansville. (CJ photo by Don Carrington)
President Donald Trump at a 2016 rally in Kenansville. (CJ photo by Don Carrington)

An executive order by President Donald Trump along with a regulatory freeze announced by his chief of staff place new barriers between Gov. Roy Cooper and his plan to expand Medicaid in North Carolina, experts say.

A restraining order issued in federal court is blocking Gov. Roy Cooper’s $6 billion Medicaid expansion plan for now. But on Friday, Trump issued an executive order commanding federal agencies to “minimize the unwarranted economic and regulatory burdens of the [Affordable Care] Act” until the law is repealed. Meantime, Chief of Staff Reince Priebus published a memo ordering a 60-day freeze government-wide on most new or unimplemented regulations.

Cooper’s proposal was being reviewed by the federal Centers for Medicare and Medicaid Services when Trump took the oath of office.

A state law prohibiting Medicaid expansion without regulatory approval means “the federal government doesn’t have the legal authority to approve an expansion,” said Jonathan Ingram, vice president of research at the Florida-based Foundation for Government Accountability.

Moreover, “at the federal level we don’t even know if [Obamacare is] going to exist anymore,” said state Rep. Greg Murphy, R-Pitt. “So I think a wait-and-see is actually the most prudent approach anyway.”

U.S. District Court Judge Louise Flanagan issued a 14-day restraining order on Jan. 14 barring the federal government from approving Cooper’s plan, and preventing Cooper or the state and federal Health and Human Services departments from submitting further amendments to the state’s health plan, which covers the Medicaid program.

Flanagan has scheduled a Jan. 27 hearing on the temporary restraining order. If she lifted the order, then Cooper’s Medicaid expansion proposal “would be subject to the regular review process,” and might fall under the scope of Priebus’ regulatory freeze, Ingram said.

Priebus’ memo, similar to those issued by other incoming presidents, provides agency heads of the incoming administration a 60-day review period to examine new and pending regulations, halting any further advancement during that time. Some state officials say that claw-back power could be exercised against Cooper’s Medicaid expansion.

However, Ingram said, Cooper’s proposal is not a regulation, so it might not be covered by the Priebus memo.

Trump’s executive order instructs the heads of federal agencies to “take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the [ACA], and prepare to afford the states more flexibility and control to create a more free and open health care market.”

The order notifies the agencies 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.”

“I think this is something that we all knew was coming,” said Murphy of Trump’s executive order. Murphy chairs two House committees that oversee health care spending and regulation.

“Medicaid expansion to the best of my understanding will not occur if the ACA is repealed. It looks like that’s what’s going to happen, so …  the whole question may be entirely moot,” Murphy said.

Ingram agrees that Trump’s executive order is unlikely to affect Cooper’s Medicaid proposal. “The executive order doesn’t grant more flexibility to states for Medicaid expansion,” Ingram said. “So they’re not encouraging Medicaid expansion.”

Ingram also said it’s “very unlikely” that states that haven’t expanded Medicaid under Obamacare would do so even if the federal government relaxed regulations. “Congress is poised to repeal the expansion altogether, so it doesn’t make sense to rush headlong into this now.”

State Rep. Nelson Dollar, R-Wake, chief budget writer for the House of Representatives, said former Gov. Pat McCrory and governors from other states that rejected Medicaid expansion had asked the Obama administration about expanding Medicaid if it were linked to drug testing or various work and job training requirements. Those proposals were rejected.

Dollar said Congress is expected to reform Medicaid as part of broader changes in welfare and health-care policies. The discussions could include ways to give states financial incentives to find flexible ways to make private health coverage affordable to more low-income working Americans.

“The problem is now Medicaid — and I see this in my office daily — has become generational, and it’s an expectation,” said Murphy, a urologic surgeon.

“I believe that that’s definitely where the law of unintended consequences comes in here, because now we have third-generation families on Medicaid,” Murphy said, adding that the law has changed “the fabric” of society. “It goes back to 1965 and the Great Society.”

Murphy said Medicaid is a worthy program to help struggling people trying to get back on their feet. But for many it has become “a way of life,” leading to resentment from taxpayers who are paying for the program.