By Josh Zeitlin, Associate Editor
Donald Trump's election as president of the United States could result in profound changes in health policy—especially as his fellow Republicans have retained control of both the House and the Senate.
As Trump and his transition team continue to scope out his health policy agenda, it's worth examining how recent trends in health care could affect the Trump administration's approach to the industry.
First, the tricky politics of the Affordable Care Act (ACA).
The uninsured rate is down
Donald Trump during the campaign pledged to "completely repeal" the ACA, which he called a "total disaster." However, the politics of fully or partially repealing the law will be complicated by the large decline in the uninsured rate, as members of Congress worry about their constituents losing coverage.
Advisory Board Chief Research Officer Chas Roades said, "We expect that repeal of the law—in some form—will be one of the first policy changes pursued by the Trump administration following his inauguration, but the practical reality of how to do that, given that much of it has been implemented, could complicate the timing and scope of the effort." The Advisory Board published American Health Line.
Perhaps recognizing these political challenges, Trump in an interview with the Wall Street Journal on Friday expressed an openness to just "amend[ing] the law." He told the Journal that he would like to keep the law's requirement to cover people regardless of any preexisting conditions and to allow young people to stay on their parents' plans until age 26.
ACA exchange premiums are up
Whether Trump chooses to repeal or merely amend the ACA, he will be able to point to real problems facing the law. Several prominent health insurers, spurred in part by lower-than-expected enrollment and the growing pains of a new market, have exited the exchanges. And many remaining insurers have hiked their rates for the current open enrollment period (with the key caveats that rates can vary greatly by county and that subsidies shield many consumers from rate hikes).
Trump made those premium increases a major part of his closing argument over the last stretch of the presidential campaign, and he made them the centerpiece of his initial argument for repealing and replacing the ACA.
Beyond the ACA: Out-of-pocket costs continue to climb
Despite all the political clamor over the ACA, only a minority of U.S. residents receive coverage through its exchanges or its Medicaid expansion. Many more—more than 150 million U.S. residents in total—receive employer-sponsored coverage, and they increasingly are being held responsible for footing more of their own bills.
The average general annual deductible for employees with single coverage has increased more than fourfold over the past decade, reflecting both that more people have plans with deductibles and that those deductibles tend to be higher than before. (Exchange enrollees often face high deductibles, too.)
Trump has called for expanding the ability of U.S. residents to use tax-deductible Health Savings Accounts (HSAs) to cover out-of-pocket health care costs, which his presidential transition website says would form part of his ACA replacement plan.
Drug price hikes make the headlines...
...As overall drug spending continues to rise
Rising drug prices have made front-page news in the past several months, including the decision by Turing Pharmaceuticals and its CEO Martin Shkreli to hike the per-tablet price of Daraprim from $13.50 to $750 overnight and the controversy surrounding Mylan's increase in the price of its EpiPen by about 400 percent over several years.
Democrats and Republicans alike—including Trump—have cried foul over the price increases of several prescription and generic drugs. What's less clear is what kinds of proposals to reign in drug costs might have sufficient support to get through Congress.
Trump during the campaign called for the United States to allow importation of prescription drugs from other countries, but that policy has historically created divisions within both parties. Trump also proposed allowing Medicare to negotiate drug prices directly with pharmaceutical companies—a policy Democratic lawmakers have long supported, but which GOP lawmakers have blocked for more than a decade.
But don't discount the power of the presidential bully pulpit or congressional inquiries: As Austin Frakt wrote earlier this year for the New York Times' "The Upshot," there's some evidence that political pressure can lead drug companies to reduce prices.
Medicare spending continues to rise (although the spending growth rate has slowed)
Beyond managing the challenges of the private health care market, Trump will face tough decisions related to Medicare spending.
On one hand, the annual average growth in total Medicare spending has slowed in recent years—from 9 percent between 2000 and 2010 to 4.4 percent between 2010 and 2015. The average growth in spending per beneficiary has slowed, too, from 7.4 percent between 2000 and 2010 to 1.4 percent between 2010 and 2015.
Yet even still, according to a January Congressional Budget Office (CBO) report, Medicare's hospital trust fund will be exhausted in 2026 if current trends continue.
Medicare spending growth is one reason that House Speaker Paul Ryan (R) has called for transitioning Medicare to a "premium-support" model. Now that Republicans will control the House, Senate, and White House, Ryan's plan faces far better odds of becoming law.
Trump's presidential transition website said the president-elect would "modernize Medicare, so that it will be ready for the challenges with the coming retirement of the Baby Boom generation—and beyond." Yet Trump told Fox Business Network in May that he would keep Medicare "the way it is" if elected—making it unclear what plan Trump might support.
Medicaid spending is also up
Trump will also face tough decisions related to Medicaid.
Medicare spending is up overall, and spending growth increased significantly in 2015, when the ACA's Medicaid expansion went into effect, although "enrollment and total spending growth slowed substantially in [fiscal year] 2016 and FY 2017," according to the Kaiser Family Foundation.
Trump has proposed block-granting Medicaid to the states as a means of controlling federal Medicaid spending. Meanwhile, Ryan and House Republicans have called for allowing states to choose between receiving a per capita allotment of federal Medicaid funds or block grants from the federal government.
Given the common ground between Trump and House Republicans on Medicaid, it's likely Congress will pursue Medicaid reform. But a bigger question is what they will do with the ACA's Medicaid expansion.
There are mixed signs about what the GOP wants to do about expansion. The ACA repeal bill passed by the House and Senate earlier this year (before it was vetoed by President Obama) would have eliminated the ACA's Medicaid expansion.
Meanwhile, Ryan on Sunday told CNN he would replace expansion "with refundable tax credits for people to buy affordable health care insurance." Two senior GOP aides told health reporter Caitlin Owens that Republicans would like to keep Medicaid expansion intact, but give more flexibility to states and make states take on a bigger share of the cost. Trump hasn't detailed his position on the issue beyond his calls to repeal and replace the ACA.
A pressing concern for providers: What's next for MACRA?
Health care organizations also face an immediate question: What will Trump do about the implementation of the Medicare Access and CHIP Reauthorization Act (MACRA)?
The law has widespread bipartisan support: It passed the House 392-37 and passed the Senate 92-8, so it's likely that the parameters set forward by CMS in its recent final rule will remain in place.
MACRA sets the stage for the future of value-based payment in Medicare, with the MIPS Track...
And the Advanced Alternative Payment Model Track
Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association, told Healthcare IT News that MACRA will continue to evolve and that changes should be expected, particularly in 2018. He explained, "There will always be refinements as we learn more in 2017 and we can expect [the Trump] administration to be open to simplification."
But most experts agree that major changes to the law are unlikely.