On Tuesday, Donald Trump was elected the 45th President of the United States and the Republicans retained majorities in both the Senate and the House. What does this portend for our health care system? President-elect Trump ran on one main policy issue related to health care – to repeal the Affordable Care Act (ACA). Could he, together with a Republican-led Congress, do this? And what might his election mean more broadly for health insurance exchanges, value-based care initiatives, and consumers' and employers' desires for more affordable health care?
In short, the Trump administration and Republican-led Congress will have a great deal of control over both the legislative and regulatory process. This will give them the ability to make significant policy changes to the ACA and other health care laws and regulations. But, full repeal of the ACA will likely be difficult.
After being sworn in on January 20, a priority in the new administration will be to assemble the cabinet and guide the nominees through Senate confirmation. In the most recent elections, the secretary of the US Department of Health and Human Services (HHS) was confirmed in the first few months – Tommy Thompson was confirmed in January of 2001 under the Bush administration, and Kathleen Sebelius was confirmed in April of 2009 under the Obama administration.
An additional priority will be to produce the president's budget, which is technically due to Congress on February 6, 2017. The first president's budget is critical because it outlines the new administration's policy priorities. Congressional Republicans are likely to want to move quickly to adopt a budget resolution and to allow for a budget reconciliation bill. This bill is the tool by which the Senate could pass significant revenue and spending measures, including changes to the ACA, because it only requires 51 votes. However, reaching agreement between the two chambers on a budget may not be easy, and budget rules are in place that limit their ability fully repeal the ACA through this vehicle.
Further, the Republican Congress has said it would like to pair a “repeal” bill with a “replace” bill that deals with existing insurance reforms, the approximately 20 million individuals receiving coverage through the insurance exchanges and Medicaid, and a host of other delivery reforms and revenue provisions contained in the ACA that have been implemented over the past six years. While the House Republicans, under Speaker Ryan's leadership, have detailed a plan, policy changes with the many moving parts and constituencies and associated budgetary costs will need shaping through a deliberative process. This will not be an easy problem to solve and will likely need to occur through the normal legislative process. It would also require Democratic support in the Senate to garner 60 votes to pass. Thus, a key challenge will be to forge compromise in the Congress on what is to replace the ACA.
What other policy action on health care needs to happen?
Some other issues to watch on the legislative and regulatory agenda include:
- More authority given to states: The new Trump Administration may work closely with states, using their waiver authority under the ACA and Medicaid to increase flexibility regarding provisions and funding under these programs.
- Expiring health care authorities: Action will be needed in 2017 on a host of expiring provisions, including Medicare extenders, funding for the Children's Health Insurance Program (CHIP), and user fee agreements between the US Food and Drug Administration (FDA) and the pharmaceutical and device industries.
- Discussions about repeal of the Cadillac tax: This policy was delayed until January 2020, but is still slated to happen. President-elect Trump and the House Republicans have said that they support repeal. However, repeal would require finding cost savings to make up for the lost revenue. Republicans have suggested replacing the lost revenue from the Cadillac tax by repealing or reducing the tax exclusion individuals receive for their employer provided benefits, but this too is not without controversy and may be difficult to pass.
What does the election mean for consumerism and delivery system reform?
Two trends of keen interest to our life sciences and health care clients have been purchasers' increased emphasis on health care consumers and on initiatives like the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). These transformations could change the focus toward finding efficiencies and lowering costs in health care. Mr. Trump has not indicated any interest in unravelling payment reform or the focus on reducing cost and improving quality. MACRA was a bipartisan, bicameral agreement to address a long-standing problem from Congress and the medical profession's perspective. MACRA is poised to transform our delivery system as it creates financial incentives for clinicians to move away from traditional volume-based services to new value-based and coordinated-care models. As the final rules on MACRA have been recently released, it is likely to move forward.
The increased emphasis on consumerism and affordability – including greater consumer responsibility for paying for health care – is likely to stay and perhaps even grow with President-elect Trump. Vice President-elect Pence is a strong promotor of adding greater financial responsibility in Medicaid programs. High deductibles, premiums, and drug prices are critical issues that are unlikely to go away. Other aspects of consumerism – having people more actively choose among health plans and providers, increasing transparency, and emphasis on patient experience in health care, and engagement with consumers through digital and social strategies – also are likely to continue.
Stakeholders in the health care world are adjusting to what few may have seen coming. It will be interesting to us policy watchers to follow the first months of the new administration – the announcements of the leadership, policy priorities, and first stakes in the ground. As the political reins and stewardship over our current health care laws are turned over, President-elect Trump will likely seek to make policy changes, particularly to the ACA. But, we need to balance Trump's desire to make policy changes with the realities of the legislative process.
Read more about President-elect Trump's key policy positions in the Health Care Current.
