What Issues Are Most Likely to Be on the Congressional Agenda, and How Does the Prognosis for That Agenda Change Based on Who Wins the Presidency?
There are many issues that will be on the healthcare agenda, regardless of who becomes president or what the makeup of the Senate and the House turns out to be. One key issue likely to generate a major debate in Congress is the Independent Payment Advisory Board (IPAB) that was included in the Affordable Care Act (ACA). IPAB has been extremely controversial, because it gives a board the authority to make changes to the Medicare program without congressional action. [Congress can overrule the decisions through supermajority vote.]
A second issue likely to be on the healthcare agenda is rising drug costs. The subject of drug pricing will be a topic of discussion whatever the election results—but will be addressed very differently depending on who is elected. Both candidates have strong positions, as does Paul Ryan, who has released a detailed plan around what the House Republicans would like to support in healthcare.
The third issue that will get attention is the expiration of some key provisions. The Children’s Health Insurance Program (CHIP) is up for reauthorization in 2017, and the Cadillac Tax, which was implemented as part of the ACA, has been delayed until 2020. Expiring provisions tend to encourage legislation. Clinton and Trump, as well as Ryan’s plan, all talk about making changes to the Cadillac Tax. [The Cadillac Tax is a 40% excise tax on high-cost employer health benefit plans.]
Both candidates, if they become president, would focus on Obamacare—but in radically different ways. A Clinton Administration would champion expanding on the ACA platform and might seek to accomplish some premium stabilization in Congress. As president, Clinton would support a new subsidy for people who have high cost-sharing in the Marketplaces—but that will be a tough road, if the Republicans control the House.
A Trump Administration would likely drive Marketplace disruption. With Trump in control, we’d probably see more authority going to the states, as well as changes in the benefit structure, including more flexibility, “skinnier” benefits, and higher deductibles.
If the Marketplaces do, in fact, face a rocky road in 2017, there will be at least a discussion in Congress about potential solutions. As we’ve seen in the past, however, it will be tough for Congress to get much done.
In What Areas Would a President Trump or Clinton Most Likely Make Changes Through Administrative Action?
If the next president faces a continuing stalemate in Congress, there are clearly things that he or she can accomplish administratively, starting with the Marketplaces. There are several initiatives that can be done behind the scenes to help stabilize the Marketplaces from insurers’ perspectives, such as tightening enrollment periods and strengthening incentives for younger, healthier people to participate. In addition, the Risk Adjustment Program has recently undergone some proposed changes that would ensure it was a truer measure of risk for insurers. A Clinton Administration will do all it can to advance initiatives that support the Marketplaces—but will be limited in what it can accomplish, if it can’t get congressional action.
A Clinton Administration also is likely to focus attention on the 19 states that have not yet expanded Medicaid. The uninsured rate already is at a record low. Expanding Medicaid in the remaining 19 states could bring insurance coverage to an additional 3 million to 4 million people.
In terms of Medicare, Clinton would continue the Center for Medicare & Medicaid Innovation (CMMI) program. There also could be a move toward prioritizing initiatives—focusing on a couple of major programs rather than trying to do 100 experiments.
In addition, as Secretary of State, Clinton was a devout practitioner of using task forces to accomplish goals. She already has announced that she would appoint a task force related to drug pricing, in response to the EpiPen issue. (For more information on the EpiPen issue, see the article later in this newsletter, “Antitrust Corner: Can Antitrust Prevent Excessive Drug Price Increases?”) We are likely to see a number of these kinds of focused task forces named under a Clinton Administration.
Clinton’s primary focus would be on supporting the ACA, while Trump’s would be the diametric opposite. He would try to erode the federal ACA provisions as much as he could from the administrative side. Rather than attempting to eliminate programs, it’s likely that he will try to devolve responsibility to the states. His agenda would call for doing as much as possible through 1115 and 1332 waivers and other mechanisms to give more flexibility back to the states.
Overall, it is hard to predict exactly what a President Trump would do, particularly in healthcare. When we look at his rhetoric, he’s taken some positions that are different than typical Republican views, such as letting Medicare negotiate drug prices.
When it comes to Medicare, the administration has developed greater authority to make changes to the program, and regardless of whether a Republican or a Democrat is in power, he or she would want to use that authority. That being said, how much either candidate can achieve will vary based on which party controls the Senate. Control of the Senate affects the ability of the president to act quickly to get agency heads and assistant secretaries in place and priorities advanced. Having to spend time on the Hill in preparation for hostile hearings takes away from a president’s ability to get things done.
Give the polarization in Congress, both candidates would most likely use their administrative authority to move their priorities forward. Even if the current administration finalizes the proposed rule around Part B, for example, the next administration would need to implement it—and would have the authority to change it. A President Clinton could use her administrative authority to address drug pricing issues. When it comes to Part D, we’ve seen a lot of speculation around how far CMMI could be used to make changes, but including Part D costs in demonstrations is something that we’re starting to see, and the next administration might want to look at that approach more closely.
While it’s not clear yet which presidential candidate will end up in the White House, it is likely that Paul Ryan will remain Speaker of the House, and whoever is president will need to find a way to get along with him. Ryan most likely will have a more limited and more conservative membership, as the people he will lose are the moderates. Therefore, he won’t have much flexibility. That may drive either a President Clinton or a President Trump to take refuge in doing things administratively that he or she can’t do with the House.
Where Will States Take on More of the Initiative for Change, Whether Through Federal Waivers or Their Own Authority?
We’re already seeing states implementing some major changes to Medicaid through 1115 waiver authority. A President Clinton would certainly encourage states to make changes and use her administrative authority to continue giving flexibility on the waivers Part of the reason is there are some things on her agenda that she knows are unlikely to be accomplished at the federal level, even with administrative authority.
For example, there have been discussions about a public option. That is something unlikely to get through the Congress or to be achieved administratively at the federal level. A state, however, could introduce a public option. Clinton also would likely encourage states to use 1332 waivers to launch initiatives that support her proposals to increase affordability.
While both candidates would support state action, their priorities would be different. A President Clinton might try to use waivers to push her agenda. A President Trump is much more likely to give states more authority to make more aggressive changes to Medicaid.
One area where we’re seeing states taking the initiative to change is transparency, particularly drug transparency. People are looking carefully at a Vermont law that targets 15 drugs that have had the biggest price increases in the last decade. States will be considering those types of transparency laws to try and spotlight drug cost issues in a new way. At the same time, consumer advocates and others are seeking greater transparency from insurers around drug formularies and other issues.
There are two sides to the continuing debate around drug costs. Some say insurance companies should work to ensure that costs aren’t borne directly by the consumer, while others say the problem is the rising drug prices. Increasingly, we’ll see these types of debates play out at the state level, simply because it’s going to be difficult to accomplish very much at the federal level.
In the end, most of the day-to-day issues get resolved at the state level. If there is a President Trump, there almost certainly would be more flexibility for states to experiment with approaches to deregulation in the Marketplaces. There is a lot of pent-up energy on the Republican side over the perception that there is too much regulation in Obamacare. Therefore, under Trump, we are likely to see efforts to give states more authority over their own Marketplaces.
In the end, the states are going to be important arenas to watch. With so much disagreement between the two parties, it could be attractive to both the left and the right to let the states experiment with different approaches and see what really works. Therefore, we are likely to witness more state experimentation, particularly driven by waivers. Medicaid expansion is really the only way that the red states have been able to reach agreement with the federal government in the last couple of years, and we’re likely to see that kind of state/federal partnership continue.
Whoever leads the next administration, it’s unlikely that we’ll see much achieved in Congress unless one party controls the presidency, the Senate and the House. Advances will be driven from the administration level, and even more so from the states over the next several years.