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Health Care on the Ballot: Four More Years or a New Direction?

How is the health care landscape expected to look over the next four years? We consulted with managed care experts to analyze what has changed since 2016, what is likely to occur if the president is reelected, and how events might unfold under new leadership.

November 3 is fast approaching and with the wait, comes a lot of tension and anticipation for what the future brings. What we can say for certain is that at some point after election day, once all the votes (including mail-in ballots) are tallied, we will know who our president will be for the next 4 years: Donald Trump or Joe Biden. It is less clear what our leader will be able to accomplish with regards to health care, given the variables. Much depends on which party or parties will control the next Congress, as well as what the Supreme Court decides about the fate of the Affordable Care Act (ACA). The COVID-19 pandemic is another variable. However, it has no party allegiance, and will likely continue to impose its will no matter who is in charge. 

Amid these obscurities, we asked four managed care experts to analyze how the health care landscape has evolved since 2016, and how the industry might shake out over the next 4 years. There are two caveats to our analysis. 

First, our experts gamely performed their analysis without the benefit of knowing who will control Congress and what the Supreme Court will decide. Once we know those things the future will likely become less cloudy, and the analysis can be recalibrated accordingly. And second, this analysis does not delve into COVID-19 plans and policy. Once we know the election’s outcome that should become clearer. Both of these subjects will be revisited by First Report Managed Care after the election. 

IF TRUMP IS REELECTED

When examining both the Trump administration’s and the Republican party’s recent actions on health care, it is safe to assume that if President Trump is reelected, we are likely in for similar forms of change, governing largely by executive order. 

Much depends the aforementioned makeup of Congress, as well as how the Supreme Court will rule in California v Texas. The court is set to hear arguments on November 10, and is expected to render a decision in early 2021 that will either uphold the ACA or render all or parts of it unconstitutional. 

The Republican Party Platform: Déjà vu All Over Again

Before speculating on Congress’ makeup and what the court will decide, it is instructive to lay out what we do know. For starters, the Republican party has adopted the official 2016 party platform with no revisions. The platform states that “any honest agenda for improving health care must start with repeal of the dishonestly named Affordable Care Act of 2010…It weighs like the dead hand of the past upon American medicine…It must be removed and replaced with an approach based on genuine competition, patient choice, excellent care, wellness, and timely access to treatment.”

President Trump spent his first year in office trying to deliver on the promise in that platform. His very first executive order led to cuts in ACA marketing and to the ACA navigator program. Subsequently, Congress—which at the time had a GOP majority in both chambers—attempted unsuccessfully to repeal the ACA  (see past First Report Managed Care analysis "Health Care Reform: What Can Payers Expect From Washington?") through the introduction of several measures, including the House’s American Health Care Act and the Senate’s Better Care Reconciliation Act of 2017. Ultimately, in July 2017, the effort to repeal failed, due mainly to nay votes from three moderate Republican senators. 

Once Legislation Failed, the Pen Prevailed

At that point, the president resorted almost exclusively to the power of the pen. In October 2017, he signed executive orders that:

Increased access to non-ACA plans via expansion of association health plans that could bypass ACA consumer protections (see past First Report Managed Care analysis, "Association Health Plans Face Uncertainty in 2020")

Ended federal cost-sharing reduction payments to insurers (though payers are still required to provide subsidies to members who qualify)

In late 2017, President Trump achieved the signature legislative victory of his first term with the passage of the Tax Cut and Jobs Act, which included a provision to eliminate the ACA mandate that Americans who could afford health insurance either buy it or pay a penalty. This led to the lawsuit challenging the constitutionality of the entire law, which is now before the Supreme Court. 

Since then, the Trump administration has addressed many other health care issues, mainly through more executive orders.

In 2018, Trump introduced American Patients First, a blueprint that included proposals designed to increase competition, improve negotiation, provide incentives for lower list prices, and lower out-of-pocket costs.  He followed that up with a rule that allows Medicare Advantage plans to negotiate Medicare Part B drug prices. The administration also issued a rule requiring pharmaceutical manufacturers to disclose list prices in their advertisements. Drug companies are challenging that move in court. (see past First Report Managed Care analysis, "Expert Roundtable: Drug Pricing")

In 2019, the president issued an executive order on health care price and transparency. It includes a rule that would require hospitals to display their prices publicly by 2021, as well as a proposed rule that would require payers to provide their enrollees with estimates of out-of-pocket costs and payments their provider would receive. 

This year the administration returned its focus to drug prices as the president signed a flurry of executive orders instructing the Department of Health and Human Services to take a number of actions, including:

  • Requiring that rebates negotiated by pharmacy benefit managers for Medicare Part D go directly to consumers;
  • Mandating federally qualified health centers who purchase insulins and epinephrine in the 340B program to pass the savings from discounted drug prices directly on to medically underserved patients;
  • Allowing states to develop safe importation plans for certain medicines; and
  • Ensuring that seniors pay no more for Medicare Part B drugs as what those in other economically comparable countries pay.

President Trump has also signaled his willingness to sign surprise medical bill legislation into law  if Congress can get it to him, and he appears to support the expansion of health savings accounts (see past First Report Managed Care analysis, "Surprise Medical Bill Legislation: What's Next?").

What a Second Term Might Look Like

Given this history, what might health care look like under a Trump second term? F. Randy Vogenberg, PhD, RPh, principal at the Institute for Integrated Healthcare in Greenville, SC, looked at it from the payer’s perspective. “At least we know the general approach that Trump uses to make change happen,” he explained. Trump starts by trying to harness market forces, shifts to regulatory modifications if necessary, followed by law change if possible. “We will likely see a continuation of this approach, impacting commercial insurance carriers, as well as ASO [administrative services organization] and TPA [third party administrator] entities.” Dr Vogenberg said he believes payers have adapted to the Trump approach. “They are now more market friendly, and have shifted from being insurance providers to providing insurance plan administrative services.” Medicare is making the shift as well, he said, via pay for performance initiatives. 

Of course, these relatively calm waters Dr Vogenberg describes assume that the Supreme Court upholds the ACA. To be sure, there is general consensus that the court will do just that. “I think it is unlikely that the ACA will be found unconstitutional,” noted Gary Owens, MD, president of Gary Owens Associates in Ocean View, DE. 

“It would be a catastrophe for the Republican party. I cannot believe that they are playing with this bottle of nitroglycerin. It seems lemming-like,” added William Rogers, MD, chief medical officer, Applied Policy, Washington, DC.

Still, as the events of 2020 have taught us, even the unfathomable is possible. So, what happens if the court declares the ACA unconstitutional? Dr Rogers described the worst-case scenario. “If the law is ruled unconstitutional it would cease to exist. Insurers would no longer be required to provide subsidies. Medicaid expansion would disappear. Millions of Americans suddenly lose their health coverage. And commercial insurers would be able to go back to denying people insurance based on preexisting conditions.” By some estimates, the number of uninsured in the United States would jump to more than 50 million people. This number had gone down to a just under 28 million in 2018 from a pre-ACA high of more than 46 million in 2010. 

Such a scenario assumes that there would be no plan to replace the ACA. This is not an unreasonable assumption, given that the administration has repeatedly promised to unveil a new plan but as of early September has yet to deliver one. “It is totally unclear how coverage for these individuals would be replaced,” said Dr Owens. 

Reading the Tea Leaves

Nonetheless, Edmund J Pezalla, MD, founder and CEO, Enlightenment Bioconsult, Hartford, CT, tried to read the tea leaves and predict what could happen. “Certainly, the exchange plans will be dropped. Still, Trump and the GOP are aware that the most popular part of the ACA is the coverage of people with pre-existing conditions, so we might see a new law that retains this and a few other provisions. States will likely petition to keep Medicaid expansion but it is possible that no new expansions will be authorized.” Under this scenario, the number of uninsured would no doubt increase, but the worst-case 50 million-plus number would be avoided. 

If the ACA is upheld, under Trump we are likely to see further executive action. “The administration will continue to chip away at the ACA,” said Dr Owens. “But without a replacement, this seems to be a recipe for disaster.” For that reason, explained Dr Rogers, it might make sense for the GOP to finally move on. At that point, “they should be wise enough to realize that the American public has figured out that the ACA is good for them. If the court challenge fails, I think the Republicans will move on and address other issues.” 

Small Improvements on Drug Prices

One of the issues that is usually top-of-mind for consumers is prescription drug prices. If re-elected, President Trump would likely move to enforce his July 2020 executive actions. Some experts believe that these actions amount to kicking the can down the road. The measures were largely a repeat of his 2018 drug price blueprint. Moreover, the powerful drug lobby appears to be poised for battle, such that meaningful change is not likely. At best, small improvements are probably in the offing. 

“Drug prices remain high,” explained Dr Owens, noting that increases are projected to be more than 5% this year, more than twice the projected rate of inflation. “Passing rebates onto consumers could be accomplished in Medicare Part D, but I am not sure this will ultimately lower prices. And I don’t think reimportation is viable. Canada is a likely target, but it continues to report multiple shortages and its supply chain is not geared to support meaningful exportation.” 

Dr Vogenberg said he agrees that impactful transformation is unlikely anytime soon. “Much has not really changed with regard to drug pricing since the Obama administration, other than industry shaming.” He noted that it’s possible the Trump administration would continue its push for market-based change by further separating Medicare from commercial insurance rules in an attempt to lower retail drug prices and patient out-of-pocket costs. At best, however, change would be incremental in 2021, and perhaps more noticeable in 2022 and 2023. A lot would depend on the makeup of Congress, he noted. 

According to Dr Pezalla, at this point, President Trump’s drug price strategy could be an attempt to secure a public relations victory. He might be able to set an international price index or coax pharmaceutical manufacturers to develop something similar, but it would not likely impact Medicare Part D, which represents most of Medicare’s drug spend. Likewise, abolishing rebates is more or less cosmetic. “The rule that it cannot increase overall prices cannot realistically be met, so he can blame failure on someone else and finally drop the idea,” said Dr Pezalla. Additionally, “buying from Canada is not workable as a wholesale program in the long run, but looks good on paper. Small versions [of this strategy] are currently working. Trump could just add to this a bit and call it a success.” 

Dr Rogers said he sees value in the administration’s move to allow Medicare Advantage plans to negotiate Part B drug prices. “At least there is one place where you have a big entity with market presence pushing back on drug pricing decisions.” 

As for health care price transparency, Dr Owens said he is not optimistic that anything meaningful will be implemented in the near-term. “It is going to be tied up in the courts and will not likely play out for years to come.” 

Dr Rogers said he wonders what the fuss is about. “Transparency is, in my opinion, just eyewash—it has nothing to do with controlling cost.” While the rule would require hospitals to publicize rates they negotiate with insurers, critics believe it will do little to help patients understand their out-of-pocket costs. Besides, asked Dr Rogers, “do you really want your gallbladder to be taken out by the least expensive surgeon in town?”

If BIDEN PREVAILS

Joe Biden had a healthy lead in the polls for most of the summer. However, the gap is tightening, and may narrow further after the debates. Should Biden’s lead continue and he win the presidential election, the centerpiece of his health care plan will be the so-called public option. This issue won out during the Democratic debates, pushing Medicare for All to the back burner (see past First Report Managed Care analysis, "What are the Democratic Candidates Really Saying About Health Care?").

According to the 2020 Democratic party platform, “the public option will provide at least one plan choice without deductibles; will be administered by CMS [Center for Medicare and Medicaid Services];… and will cover all primary care without any co-payments and control costs for other treatments by negotiating prices with doctors and hospitals, just like Medicare does on behalf of older people.” The public option will be added to the ACA health plan marketplace. Biden also plans to restore funding for ACA outreach and enrollment programs. 

Additionally, low-income individuals, including those who live in states that have not expanded Medicaid under the ACA, will be automatically enrolled in the public option without having to pay insurance premiums. Opt-out would be optional. Individuals aged 60 and older would have the option of keeping their employer plan, choosing the public option, or enrolling in Medicare. 

Making ACA Plans More Affordable

The most enduring criticism of the ACA is how unaffordable plans can be for those who do not qualify for subsidies. Biden wants to address this by guaranteeing that no one will pay more than 8.5% of their income in premiums and eliminating the subsidy cap. 

Like Trump, Biden plans to take on the pharmaceutical industry. But unlike the president, he wants to allow Medicare to negotiate drug prices across the board, including Part D. Additionally, Biden will seek to prevent drugs from rising faster than the inflation rate, and cap out-of-pocket drug costs for seniors. Also like Trump, Biden will seek measures that provide health care price transparency, and will sign surprise medical bill legislation. 

Under Biden, “payers need to get ready for some flavor of a public health plan,” said Dr Vogenberg. While much depends on the makeup of Congress and whether the Senate’s filibuster can be eliminated, “there is a greater likelihood of some form of expanded public access to care beyond what has been tried with the ACA.” Payers would “face a significant change in their business focus” by having to compete with the public option. There also might be opportunity for insurers. 

One possibility is allowing citizens to choose a Medicare Advantage-type plan, something vice presidential candidate Kamala Harris raised during the Democratic debates. At the time, Dr Owens noted that the Harris plan appeared to be “the least aggressive version of the single-payer proposals. The option of buying into a Medicare or Medicare Advantage plans may be attractive to many, especially older individuals who retire early and need a transition from employer-sponsored coverage to Medicare.” 

Dr Owens is questioning whether the public option goes too far. “It becomes a competitor to both the ACA and private insurance. Why not figure out ways to improve ACA by creating affordable programs and options that could expand its usefulness.” He agrees that Congress holds the key. “If Congress is divided again, I suspect we will have more partisan positioning and minimal progress to new solutions.”

A Pathway to Expand Medicare Seems Possible

The debate centers around how much involvement the government should have in health care, as well as how to afford the public option. On the latter, Biden said he plans to increase taxes on those earning more than $400,000. He would also increase the corporate tax rate, and tax long-term capital gains and dividends at the ordinary tax rate on income above $1 million. 

However, according to Dr Rogers, for the public there is little debate. “People with Medicare love Medicare. You are not going to get a lot of opposition from people who know what Medicare is.” Thus, he said he believes lowering the age of Medicare eligibility to 60 is something even a divided Congress may agree upon. 

Dr Pezalla said he concurs. “Of all the Biden proposals, extending Medicare enrollment to a lower age—probably 60 but possibly even lower—would be popular and could pass with a low margin of Democratic control.” He said he believes it would be a win for all stakeholders. “It will remove the burden of the highest cost commercial plan demographic from employers and insurers. It places a somewhat healthier population into Medicare—higher contributions will improve the finances of the entire program. And it allows for more job mobility, early retirement, and flexibility for older workers.” 

In addition to the public option and lowering the age of Medicare eligibility, molding the ACA into what was originally conceived during the Obama administration will be a priority. Dr Rogers said he thinks Biden will bring in Obama alumni or their colleagues to find ways to increase subsidies and cap out-of-pocket spending. Dr Owens said he doubts it can be done. “With the amount debt the US has racked up due to COVID-19, I don’t see much likelihood of government increasing insurance subsidies. If that happens there will have to be significant tax increases, which is a difficult sell.”

Allowing Medicare to Negotiate Drug Prices is Complex

As for drug pricing, all of our experts agree that Biden will face the same challenges as Trump. He might face even greater hurdles in his efforts to allow Medicare to negotiate drug prices. “The Medicare law underpinning Medicare part D—along with other statutes—would need to be changed to allow negotiations on price,” explained Dr Owens. “The headwinds will be difficult to navigate.” 

Dr Pezalla noted that the effort would require some form of drug evaluation, probably from a health technology assessment-type body. “It would be more impactful than the international price index [Trump is seeking] because it covers more of Medicare and could create a reference that might be used in the private sector.” Still, Dr Owens said he worries that driving down Medicare drug prices would likely drive up commercially insured prices. “The air in the balloon has to go somewhere.” 

While there are too many unknowns to place a sure bet on what exactly will happen after Inauguration Day 2021, the smart money, said Dr Owens, is on a surprise medical bill law. “This is low hanging fruit for Trump or Biden and could get done—if Congress wants it to happen.” 

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