Uncertainty and opportunity: Trump’s health agenda
Elections come with uncertainties. A new leader is always something of an unknown. The election of Donald J. Trump as president is no exception and is compounded because he has never campaigned for, nor held, a public office. In the health sector, questions about the president’s proposed repeal of the Affordable Care Act (ACA) and changes to Medicaid and Medicare abound.
An estimated 20 million people gained insurance as a result of the ACA. Congressional Republicans are eager to stabilize the current insurance market while they reform it. But achieving this objective is complicated, both from budgetary and political perspectives. The post-election dip in share prices of hospitals and some insurance companies indicates that the market expects a decline in coverage. Congressional Democrats are expected to fight to preserve coverage for those who have it under the ACA.
Trump has voiced a willingness to retain popular features of the ACA, namely allowing dependents to remain on their parents’ health insurance until they turn 26 and extending pre-existing condition protections if consumers maintain continuous health coverage. But he also signaled his aim to replace other features of the ACA by promoting greater use of health savings accounts (HSAs) and extending the sales of policies across state lines.
Changes to Medicaid also are being contemplated. President Trump is being pushed by congressional Republicans in the House of Representatives to provide governors more flexibility in administering their Medicaid programs through block grants or a per capita allotment approach. But some Republican governors oppose that change and some in Congress want a similar approach to the Children’s Health Insurance Program (CHIP) when it comes up for renewal this year. This could give states wide latitude in determining just how their Medicaid and CHIP dollars are spent.
While Medicare reform won’t likely be part of the initial replacement legislation, House Speaker Paul Ryan believes reform is necessary, and likely will continue encouraging the Trump Administration to pursue reform ideas through regulatory and future legislative proposals. President Trump recently referenced drug pricing issues as a key priority for his administration. It is unclear, though, how Congress will react to his ideas about this topic. While uncertainty remains, some recommendations do come to mind:
- Stay focused because the major trends in the health sector have not changed. The drivers (increasing costs, changing demographics, rises in chronic diseases) and enablers (Internet of Things, big data and analytics, digital health) are the same, and the focus on value and outcomes instead of fee for service is still central.
- Trust what you know. Careful analysis of your customer data can help you model the effect of insurance cuts on the populations you serve and determine how this will impact your revenue.
- Look for growth opportunities, such as changes to the corporate tax rate or a repatriation holiday, which may give balance sheets the boost needed to expand or acquire new capabilities or grow core strengths in new a territory.