For all the heated rhetoric throughout the campaign season, there was a lack of substantive policy discussions. Nowhere was this more evident than in the world of healthcare. President-elect Trump avoided talking specifics, other than saying he was opposed to the Affordable Care Act (ACA) and that if he were elected, he would repeal it. Since his election, his stances have shifted and bent from day to day, adding more uncertainty about where he stands. Even his transition team’s website has only a precursory document highlighting some of his past statements about healthcare.
So, we are left to divining meaning from news reports and the team that he is putting together around him. The nominations of Congressman Tom Price (R-GA) to be Secretary of Health and Human Services (HHS) and Ms. Seema Verma to be the Administrator at the Centers for Medicare and Medicaid Services (CMS) give us some of the best indicators of how he will approach health issues moving forward. And, it is not good news for the ACA.
Congressman Tom Price. The nomination of Congressman Price, current chair of the House Budget Committee, is a clear signal that a Trump Administration will not lose any time in working to dismantle the ACA through legislative avenues, and regulatory pull backs. Chairman Price, a physician by training, is a well-respected leader on healthcare issues among his House Republican Caucus colleagues. He has been a key leader in Republican efforts to defeat the ACA when it was being legislated, and in subsequent efforts to repeal it since it was enacted in 2010. It is important to note that opposed to some in his caucus, he was one of the few members to put forward a substantive plan to replace the ACA for consideration during “repeal and replace” efforts.
In his proposals, Chairman Price has championed a complete overhaul of the insurance and healthcare marketplace. Instead of saving some parts and replacing other parts of the ACA, Price’s plan seeks to completely change the financing of healthcare in our country. His plan, which many components have been adopted into Speaker Ryan’s “A Better Way” agenda, include:
- Replacing the ACA’s individual mandate with age-based tax credits for individuals to purchase private insurance
- Promoting health savings accounts to help individuals cover costs, creating “risk pools” for high-cost insurance enrollees at the state level,
- Allowing insurance companies to sell policies in multiple states.
Additionally, Chairman Price has been a staunch opponent of many of the Obama Administration’s efforts to investigate and promote innovation in delivery system reform.
Ms. Seema Verma. In addition to the nomination of Chairman Price, the Trump Administration announced the nomination of Ms. Seema Verma to be the Administrator of CMS. This position is akin to being the CEO of what is the largest purchaser of healthcare services in the country, overseeing both the Medicare and Medicaid programs. Ms. Verma, who has close ties with Vice President-elect Pence, advised then Gov. Pence on Medicaid policy, including the development of the state’s Medicaid expansion policy under the Affordable Care Act –Healthy Indiana Plan 2.0. That plan included a number of conservative principles including work requirements, mandatory health literacy education, and the promotion of health savings accounts for enrollees. Since the approval of the Indiana Medicaid program, Ms. Verma has advised and assisted numerous other states that are currently attempting to implement similar restrictions on enrollees in their state Medicaid programs.
So, what do these nominations mean? It appears that the Trump team is committed dismantling the ACA as we have come to know it. But, it could also be an indication of bigger things. These nominations seem to be clear signs that the Trump Administration, and opponents of the ACA in Congress, will attempt to use their majorities in both chambers to push forward sweeping changes that will impact the healthcare financing structure across the country.
Chairman Price and the Republican House Caucus have been vocal in their support of privatizing Medicare and giving senior vouchers to purchase healthcare themselves. Additionally, the types of changes to Medicaid that Veema pushed as part of the Indiana plan, combined with Republican’s support for block granting Medicaid dollars to the states, represent fundamental shifts to these safety net programs that millions of people rely on each and every day. Because these programs are the largest purchasers of healthcare in their country, changes to them will most definitely impact the private insurance marketplace and the healthcare system more generally.
While the House of Representatives is likely to push an aggressive health reform agenda, a lingering question will be how large of an appetite Senate Republicans will have to engage on these broader policy initiatives. The 2018 Senate map heavily favors Republicans, with many red state Democrats up for re-election. This could induce some Democrats to come to the table to work with the majority party.
At the same time, there is no certainty that Republican will be unified when it comes to a replacement. It is very likely Republicans will need at least some Democratic support to pass something. This could increase the pressure on Republican leaders to work with Democrats, and increase the minority party’s leverage. With a number of competing priorities, it is unclear if Senate Republicans will be comfortable moving beyond repealing and replacing the ACA, and taking up broader reform efforts like Medicare reform.
Looking ahead. Right now, it is an almost inevitable conclusion that Congress will pass an ACA repeal package that President-elect Trump will sign early in his administration. Beyond that, uncertainty reigns. How Congress will craft and pass an ACA replacement package is unclear.
- What executive actions will it take unilaterally?
- How will the confirmation process of Chairman Price and Ms. Veema impact future legislative activity?
- Will Congress and the Administration go beyond just replacing the ACA, and look at wholesale Medicare and Medicaid reform?
- And, what does this all mean for the industry (hospitals, doctors, insurers, pharmaceutical companies, medical device manufacturers, entrepreneurs, innovators, employers) and the national economy as a whole?
While the answers to these and many questions are unclear, it is imperative to plan and engage at this important time. You never know what will come next.