Healthcare’s sky isn’t falling; President-elect Trump’s path forward

Friday, Healthcare IT News reported that most healthcare executives “express a dystopian view of a Trump presidency’s impact on healthcare”.

While significant changes to the ACA and beyond are coming, the sky won’t be falling any time soon.

Political reality, market and fiscal pressures and President-elect Trump’s statements before his election and since make that clear.

Here’s what lies ahead.

What will change.  Trump’s election will accelerate the ACA’s demise. 

His victory won’t be its cause.  

The ACA’s combination of a weak individual mandate, broad mandated benefits and guaranteed issue hard-wired that outcome.

The individual mandate is the ACA’s least popular provision.  That’s why the Obama Administration weakened it during implementation.  It’s certain to go.

Mandated benefits that ignore what people want and can afford are on the way out.

The indirect cross subsidies baked into guaranteed issue will be replaced by risk pools.

Premium support for lower-income Americans will continue; government-supported exchanges as the clearinghouse for subsidies likely won’t.

Rate band limits designed to charge younger people more to subsidize the costs of older, less healthy people will be significantly loosened.

Friday, the transition office restated a Trump Administration’s commitment to “maximize flexibility for States in administering Medicaid”.  One size fits all Medicaid’s days are numbered.

What won’t change.  The President-elect told The Wall Street Journal on Friday he wanted to maintain protections for people with preexisting conditions and continue allowing children up to age 26 to remain on their parent’s health policy.

Many were surprised.  They shouldn’t have been; these are among the ACA’s most popular provisions.

In its Friday statement, the incoming Administration restated its commitment to modernize Medicare.  Medicare’s fiscal pressures won’t disappear January 20th.

Expect an acceleration of CMS’s push towards value-based reimbursement and a renewed focus on Medicare Advantage.

While narrow networks are politically unpopular, the fiscal realities and market pressures driving more tightly integrated provider networks will continue.

The incoming Trump administration has put a premium on “a patient-centered healthcare system”.  The market’s going this way as well.

While a massive new investment in health IT isn’t likely, expect a continued focused effort to leverage the Obama Administration’s investment in EMRs by breaking down the silos between these systems. 

One other thing won’t change—healthcare will remain a dynamic enterprise that places a premium on innovation and vision. 

Gary Mendoza was California’s HMO regulator in the mid-90s and the Republican candidate for Insurance Commissioner in 2002.  He is CEO of Health eWay, healthcare’s mobile first platform.

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4 replies »

  1. One comment: In order to reassure that the sky isn’t falling from a provider perspective, you need to reassure that whatever new scheme is cooked up, Medicare and Medicaid are funded at a level that can be widely profitable, or at least survivable. Block grants to Medicaid are hinted at but not mentioned here, and there is no mention that the funding level for these grants would be adequate for the safety net delivery system to function. I don’t think anyone knows at this point what will happen to Medicaid funding overall, or per unit of service, but then you can’t really reassure providers that the sky isn’t falling, or won’t fall in 2018.

  2. If preexisting conditions remain, coverage must be phased in over 3-5 years, less claims paid, to address adverse selection
    Even the high risk pools typically had waiting periods of 6 months
    Contributions should be fully community rated and should vary only by amounts purchased
    Coverage should last a lifetime
    Plans like this are available nationwide from $5,000-$60,000

  3. Rearranging the way we buy health insurance does not create value. Unless the fundamental cost issues are addressed, higher out-of-pocket expenses and narrowing networks that affect both ACA and employer-based plans will continue.

    The HITECH mandates that consolidated control of health information technology into giant information-blocking silos must be reversed by giving patients the unhindered ability to direct our information to any provider, any healthcare service, and any technology that wants to compete on the basis of quality and cost.

    To bring healthcare costs inline with other developed economies, we need to focus on practice innovation, appropriate use of technology, and access to independent decision support at the point of care.