The United States healthcare system has reached a pivotal moment following President Obama staking much of his first term on passing the Affordable Care Act and President-elect Trump running on a campaign promising to “Repeal and Replace” it on his first day in office.
This article was published in the Dallas Morning News on 11/14/16 and meant to be a bipartisan analysis of the options: http://www.dallasnews.com/opinion/commentary/2016/11/14/post-election-next-obamacare
Obamacare lingered in the background as a campaign issue until late October, when the 2017 insurance premiums were released with double-digit premium increases. Healthcare then became a top campaign issue as Trump doubled down on his position to repeal.
Following his White House meeting with President Obama, President-elect Trump now shows a willingness to compromise and leave intact ACA components, including two key provisions. Specifically, allowing parents to keep children on their policies until age 26 and not allowing refusal of coverage by insurers for pre-existing conditions.
I just returned from the Harvard Business School Alumni/YPO Presidents annual healthcare conference and a primary conversation topic was: What will happen next?
Here are some of the political details covering President Trump’s options and their likelihoods:
Repealing the Affordable Care Act, or Obamacare, would require 60 senate votes. After losing two, there are only 52 Republican senators, so a repeal would require a significant degree of bipartisan support. There is also a Reconciliation Fast-Track process allowing amendments to specific parts that impact the budget. This process only requires a majority vote, which the Republicans have.
Donald Trump has always stated he was in favor of universal insurance coverage while House Speaker Paul Ryan and the Republicans have been for privatizing Medicare and supports open insurance markets, and he’s against Medicare/Medicaid expansion.
The general consensus was that the GOP Replacement Plan would most likely include the following key planks:
· Expansion of Health Savings Accounts (HSA)
· Elimination of the individual mandate penalizing non-coverage
· Open insurance purchasing across state lines
· Amend the guarantee of coverage for pre-existing issues to continuous coverage
· Create lower catastrophic premium options
· State flexibility to shape insurance markets
· State Medicaid reform
· Standard tax credit with flexibility to use across commercial market
· Limit Medicare growth through per capita caps
· Strengthen Medicare Advantage
· Repeal IPAB (Independent Payment Advisory Board)
· Possibly repeal CMMI (Centers for Medicare and Medicaid Innovation) that drives innovative payment and quality models like Accountable Care Organizations
· Continue promoting value based Medicare FFS migration through MACRA (Medicare Access and CHIP Reauthorization Act )
More power will return to the states with support from 33 GOP Governors. One important difference in the news this week was on the guarantee for pre-existing coverage. Many Republicans support replacing it with a guarantee for continuous coverage for pre-existing issues. Their rationale is this new guarantee will keep people from gaming the system by not paying premiums until he or she has an issue.
The financial markets saw sharp increases in pharmaceutical stocks this week that had been troubled during the election. Hillary Clinton proposed measures to control pharmaceutical costs, including fines on drug manufacturers imposing unjustified price hikes and capping drug prices. Trump’s election website announced two initiatives to “Advance research and development in healthcare,” and more pointedly, “Reform the Food and Drug Administration, to put greater focus on the need of patients for new and innovative medical products.” This is being seen as a very positive sign for Biotech companies.
Hospital Operators, including HCA and Tenet, saw stock declines last week because of fears that a repeal would leave them caring for more uninsured patients after benefiting from the 20 million new insured members from the ACA. Publicly held managed care groups like Centene and Molina Health also saw losses due to anticipation for scaling back Medicaid coverage.
At Hormone Therapeutics, we have built a national telemedicine platform providing access to physicians specializing in many of the chronic care conditions associated with aging previously unavailable in most areas of the country. We hope that President-elect Trump supports the recent advances in digital health providing increased access, improved care and lower costs by keeping patients out of hospitals that do not need to be there.
Affordable Care Act voter frustration centered on premium increases that occurred again right before the election. The price increases were due to actuarial issues from an increase of older, unhealthy members without enough young, healthy ones signing up. While this reflects very significant problems in the insurance marketplace, the entire ACA was presented as a failed platform because of this. Throwing 20 million newly insured off of their health plans would be political suicide in the next election for Republican Senators and Governors. No one has a real health reform plan that expands coverage while lowering costs.
The biggest questions start with understanding what battles soon-to-be President Trump chooses, and whether he’ll agree to reach across the aisle and work with fellow deal maker Minority Leader Charles Schumer. Will he keep his campaign promise to try and repeal and replace it with something terrific or seek to amend certain parts? Does he intend to undo all of the monumental work that went into providing coverage to 20M additional uninsured and creating the Baylor Scott & White Affordable Care Organization and others just like it across the country? Does he want to remove the pre-existing guarantee, individual mandate and subsidies to go back to 2008?
Hopefully, everyone can work together to continue to improve the progress being made to make America’s healthcare system great by working to improve the quality of care, expand coverage, reduce readmissions, align the providers, insurers and patients all while reducing costs. This is an extremely complex undertaking and can only be accomplished collaboratively and over time.
Hunter Howard, President of Hormone Therapeutics, spent the past week at the Harvard Business School Alumni/YPO Presidents annual Healthcare conference discussing these issues with healthcare business leaders from around the globe. He has founded and led three Health/IT Companies: Hormone Therapeutics, MediGain and Ocracoke Health Consultants
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