Goodbye Obama(care), Hello Trump-what exactly?

Goodbye Obama(care), Hello Trump-what exactly?

What does this presidential election mean for the world of healthcare

The results are in and it’s official, Republican Donald Trump will be the United States’ 45th President. What exactly does this mean for the world of healthcare? It looks like we’re in for an interesting ride as one of Trump’s major calls to action has been to repeal the Affordable Care Act. Now, with the GOP’s holding control of the Senate the and the House, this is entirely possible along with the implementation of some of the proposals outlined in the GOP party platform.

So, what exactly does the Trump’s agenda include? The following:

  1. Complete repeal of the ACA
    • Trump has been very adamant about getting this done ASAP, he’s said “When we win on Nov. 8 and elect a Republican Congress, we will be able to immediately repeal and replace Obamacare. We have to do it. I will ask Congress to convene a special session so we can repeal and replace.” (Source: Modern Healthcare)
    • “A sweeping change to the direction of ACA would create billions of dollars in churn. Nearly one-fifth of our economy touches healthcare spending, and a change in direction, such as repealing ACA, would require a recalibration of nearly seven years of private-sector compliance. The cost to private industry to change direction would be staggering and, in all likelihood, would do little to impact the cost curve of healthcare spending.” – Jeff Smith, vice president of public policy for AMIA
    • One of the biggest challenges Trump faces with this is the ~20 million people that have health coverage because of the Affordable Care Act, what will be their alternative?
    • Additionally, many value-based care initiatives were created as a result of the ACA, so it’s unclear if there will be any effort to study new reimbursement mechanisms. What is clear is that the pace of this reform will change.
  1. Allowing health insurance to be sold across state lines
    • Trump’s thinking is that by allowing full competition in this market, insurance costs will go down and consumer satisfaction will go up.
    • However, allowing health insurance to be sold across state lines could lead to a “race to the bottom” among health insurers in terms of offering coverage with skimpy benefits. Making all health benefits fully tax-deductible would also be a bigger help to wealthier individuals than those of middle and lower incomes.
  1. Increasing promotion of health savings accounts
    • Promoting tax-free health savings accounts might help individuals save money to pay for health care costs and allow people to deduct the cost of their premiums on their personal income tax returns.
    • These accounts would become part of the estate of the individual and could be passed on to heirs without fear of any death penalty. Trump says these plans should be particularly attractive to young people who are healthy and can afford high-deductible insurance plans. These funds can be used by any member of a family without penalty.
  1. Requiring price transparency from all healthcare providers
    • This proposal has been praised for observing that most consumers have little bargaining power in the absence of knowing exactly what their care costs.
    • Gerald Kominski, director of the Center for Health Policy Research at the University of California at Los Angeles says, this “was the one aspect of healthcare reform from the Trump campaign that makes a lot of sense.”
  1. Block-granting of Medicaid funding to states
    • A study by the Commonwealth Fund found that if block granting of Medicaid is included, coverage could decrease by as much as 25.1 million.
    • Trump and GOP congressional leaders want to convert the low-income health coverage program into a system of capped federal contributions to the states and give state leaders enormous freedom to set eligibility, benefits and program structure.
    • Conservative experts argue that giving states more flexibility under the block-grant approach, such as letting them set work requirements and trim benefits, would enable them to cover this population more cost-effectively
    • Healthcare providers are wary of this approach: “I distrust the intent of 50 different states to appropriately support people who need healthcare coverage to do that through the complete freedom of block grants,” –Dr. William Conway, CEO of the Henry Ford Medical Group,
  1. Making health insurance premiums fully tax-deductible
    • Trump: As we allow the free market to provide insurance coverage opportunities to companies and individuals, we must also make sure that no one slips through the cracks simply because they cannot afford insurance. We must review basic options for Medicaid and work with states to ensure that those who want healthcare coverage can have it.
    • The Commonwealth Fund study did note that Trump’s deductibility and state line easements could increase insurance coverage among families earning more than $60,750 annually by as much as 4.1 million, however that would be further concealed by the overall decline in coverage
    • The study also found that a tax deduction would result in average out-of-pocket spending of about $3,500 per year, because the tax deduction is less generous on average than the ACA’s Advanced Premium Tax Credits (APTCs) and cost-sharing subsidies, particularly for the lower- and middle-income people who benefit from these policies

Trump could also embrace the health care plan promoted by House Speaker Paul Ryan.  It starts with repealing the Affordable Care Act and includes many of the same values as Trump’s plan, but offers more details. Trump has indicated that he favors Ryan’s approach of covering people with preexisting medical conditions through state high-risk pools rather than requiring insurers to accept all applicants regardless of health status.

We can’t know for sure what promises will be followed through with or what policies will be passed, for now we play the waiting game, and trust that the end goal for everyone is the same: solutions that deliver high-quality care and affordable coverage for everyone.

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