healthcare sanctuary city
Employee Benefits

Healthcare Sanctuary City

Den Bishop
Den Bishop
Senior Advisor

The term “sanctuary city” does not have a consistent definition, but it does provoke a wide range of emotional (and political) responses. I will define a sanctuary city as a jurisdiction where local authorities have made a conscious and declared decision to not enforce certain federal immigration laws. These local authorities lack the power to change the laws, so they simply don’t enforce them.

President Trump effectively created a healthcare sanctuary city on his first day in office. His campaign promise was to repeal Obamacare on his first day. Like the local authorities on immigration, he lacked the power and the votes to immediately change or repeal the Affordable Care Act (ACA). Therefore, he decreed that government agencies can choose to ignore that which they cannot change.

Section 2 of his Executive Order states the following, “To the maximum extent permitted by law, the Secretary of Health and Human Services (Secretary) and the heads of all other executive departments and agencies (agencies) with authorities and responsibilities under the Act shall 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.” 

So what does this mean in English? It means that President Trump intends to look the other way as department and agency officials determine which parts of the ACA they intend to implement and enforce and which parts they simply choose to ignore. This is very much in line with the way mayors instructed local law enforcement that they would ignore federal immigration laws and do what they felt was right in lieu of what the law stated.

So what does this mean for healthcare stakeholders? Will the IRS choose to not enforce the shared responsibility payment (AKA individual health insurance mandate penalty)? Will insurance companies be forced to pay the health insurance industry fee? Will large employers who choose to not offer coverage still have to pay the penalty for not offering credible health insurance coverage to their employees? Will health insurance companies be forced to reimburse customers if their medical loss ratios come in under the 80 percent and 85 percent mandates? All these questions and more are now unanswerable.

Although the ACA has not been repealed, the future enforcement of its mandates, fees, penalties, and other provisions is very much in doubt. The health insurance marketplace and the employers who fund the majority of the cost need predictability and certainty. One thing is certain…what exactly comes next in healthcare is far from predictable!

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