The unexpected election of Donald Trump, the return of a Republican House and Senate in 2017, and the appointment of Rep. Tom Price, an ardent Obamacare opponent, as HHS Secretary, portends a year of enormous change for this country’s healthcare industry. What is likely to change, how much will it change and how disruptive will the changes be are the questions on everyone’s mind.
While Trump campaigned on a promise to repeal the ACA—and the Senate has voted scores of times for its repeal—don’t expect that to be as simple as it sounds. “Repeal and replace” is most likely, leaving many aspects of ACA in place under a new name. Changes could include switching tax subsidies to tax credits, modifying/reducing the required essential benefits, changing rating ratios on the exchanges, bringing back high-risk pools, allowing some types of health insurance to be sold across state lines, and reducing or eliminating of some of the quality requirements.
Rolling back the ACA Medicaid expansion also would be problematic because of the potential for serious financial consequences to the 31 states that have already expanded their programs. Under Seema Verma, Trump’s proposed CMS director who led the development of Indiana’s Medicaid expansion, expect expansions to continue with conservative, Indiana-like, provisions for those states electing to expand their Medicaid populations. This could include copays, premium contributions and required work provisions. As a result, most of the 19 states that did not expand their Medicaid program will probably opt to do so under a President Trump.
Medicare will almost certainly see proposed changes under a “Medicare modernization” bill that could include a stronger push to managed care including more direct contracting with provider organizations, less emphasis on quality oversight and innovations from CMS, some form of vouchers or premium support that would reduce the government’s financial underpinnings to premiums and a concerted effort to privatize the program. Despite Trump’s insistence on changing policies to allow the government to negotiate for better pharmaceutical prices, it is unlikely that this will happen given the drug industry’s lobbying clout.
Children’s Health Insurance Program (CHIP)
On top of all of these likely changes, CHIP is slated for its 10-year reauthorization in 2017. Previously a bipartisan program, the program was much touted by Secretary Clinton during her presidential campaign as one of her signature achievements. It wouldn’t be surprising to see this program included in Medicaid block grants or rolled under the healthcare exchanges as a way of shoring up risk pools and lowering premiums.
Most of these changes even, if they are enacted, would take at least two to three years before becoming effective. However, we are clearly in a political environment that is different from one we’ve ever seen so the rules of the game are still being written.
Healthcare has never been faced with the prospect of such across-the-board changes to virtually every aspect of how we manage the cost and delivery of care. If this isn’t keeping you and the rest of your executive team up at night, it should be.