The ACA's Unspooling is Near
When Donald Trump takes office in January, he’ll face enormous challenges domestically and globally. Healthcare will be at the top of the list: he promised to “repeal and replace” the Affordable Care Act, and he pledged changes that strengthen the system in his campaign’s seven-point plan. In this effort, his team will face harsh realities.
The public is divided about the ACA: Half believe it a necessary impetus for expanding insurance coverage and lower costs, and half feel it’s an overreach by federal bureaucrats that want a government-run health system.
Details about the Trump healthcare agenda are not clear, but the campaign promised to repeal and replace the ACA on his first day in office. With majorities in both houses of Congress, the vehicle whereby the law can be changed is straightforward: The bigger questions are how it is to be replaced.
After the vote, it’s likely a series of administrative orders and targeted legislation will follow that begin the process of undoing the ACA including:
Dismantling Healthcare.gov and transitioning control of the marketplaces to the states
Negotiating with Congressional budget officers and HHS for the transfer of Medicaid responsibility to the states via block grants
Expanding tax credits and high risk pools for individuals and allowing purchases of insurance across state lines
A new administration has 4,000 political appointments to make including more than 200 in key healthcare slots. Since cooperation with states will be central to the new administration’s health strategy, the HHS Cabinet position is likely to be filled by a former Republican Governor with state healthcare officials filling many of the key slots. Dr. Ben Carson, a former Presidential candidate himself, is likely to play a key role along with other campaign operatives in their selection.
The new administration and Congress will also advance bills to eliminate the Cadillac tax on employers and medical device tax as a start. With the composition of a supportive Congress, the low-hanging fruit include ways to improve Veteran’s Health programs and potentially legislation to control drug prices.
The honeymoon for a new administration is short, particularly one elected in a bitter Campaign season in which distrust for the leading candidates was the central issue, so how the political posturing will go remains to be seen. The Trump team is unknown on Capitol Hill, so uncertainty abounds. Confirmation of cabinet appointments will surface how battle line are drawn. The confirmation of the Supreme Court vacancy left by the death of Justice Scalia will be huge symbolically as ideologues flex their muscles.
So, what does all this mean for the stakeholders in the industry—the providers of services, the intermediaries who organize networks and negotiate rates, and the manufacturers of the drugs, technologies and “stuff” we use?
It means the role of the federal and state oversight will change in every aspect of our businesses.
It means cost containment will be table stakes as margins shrink. Healthcare spending will increase, but at a slower pace. There will be winners and losers in every sector.
It means the line between financing and delivering care will fade as providers take on responsibility for insurance and affordability. Hospitals will become systems of health.
It means the gaps between health services and human services and between physical and mental health will narrow as health is redefined.
It means the business of healthcare will be exposed to greater scrutiny—how we operate, how we negotiate deals, how we are structured, and who wins and losers. Transparency was a prominent pledge in the Trump campaign.
Campaign 2016 is now history. President-elect Trump’s business savvy will no doubt be the underlying theme of his administration. It will be put to the test at home and abroad, and especially in our healthcare system.
Paul Keckley is a healthcare author and researcher. A version of this article originally appeared on his website, paulkeckley.com.