November 07, 2018

The Election’s Impact on Health Care Interests

The results of the midterm elections will bring about a significant change to the federal health care policy landscape in 2019.

Democratic control of the House of Representatives will effectively end any legislative threats to the Affordable Care Act (ACA) or significant reforms to Medicaid, such as a revival of the per-capita cap or block grant proposals of last year. It will also result in aggressive oversight of executive and regulatory actions by the Trump Administration that may be intended to undermine core tenets of the ACA. It also creates the possibility for the Trump administration, a Democratic-controlled House and some influential Senators to reach a wild-card agreement on drug pricing reforms.

While some of the dust from Election Day 2018 remains to be settled, 2019 will see a return to a split Congress, with a Senate more firmly in Republican control and a House that flips back to Democratic leadership for the first time in eight years. This will resemble the divide the country last had during 2011 to 2015, when Democrats held the White House and Senate and Republicans controlled the House. And just as Republican House leaders had to navigate the challenges between an increasingly right-leaning chamber, House Democrats will face similar challenges in managing a caucus that has moved leftward.

Although significant statutory threats to the ACA and systemic changes to Medicaid are now off the table legislatively, the Administration may continue its aggressive use of regulatory authorities to advance its health priorities, such as actions over the past year focused on Association Health Plans (AHPs), Short-Term Limited Duration (STLD) policies and Health Reimbursement Accounts (HRAs). However, the ability of Democrats to run successfully on Obamacare in several districts, along with voters in three solidly Republican states opting to expand Medicaid, it would not be surprising if some of the ACA opposition activity diminishes. And with a House soon to be controlled by Democrats, the Administration will face oversight and investigation threats to its use of executive powers that it has by-and-large been able to avoid until now.

House Democrats will not only be interested in protecting against future disruptions to the ACA, but in fixing some of the aforementioned Administration policies to stabilize the marketplaces and maintain protections for pre-existing conditions, particularly given pending litigation. While Republicans have spoken strongly of supporting such protections, the rhetoric has not been matched by policies that would clearly maintain them. An additional wrench in the ACA landscape will be an internal Democratic divide between members who support single-payer/Medicare-for-all — and how that could create optics the Democratic leadership would rather avoid heading toward 2020.

With an expected near-instantaneous pivot to 2020 and the partisan divide, the big overarching question will be what topics can attract bipartisan support. Continuing to address the opioid crisis is one such area, but given the political chasm between the parties and an immediate focus on the 2020 election, it would be surprising to see deals reached on fixes to the ACA or on other more vexing topics, such as reforms to Medicare and Medicaid.

One potential area of agreement between the Trump Administration, the Democratic House and some influential Senators is the topic of drug pricing. Over the past several weeks, the Administration has released a slew of regulatory policies focused on drug costs, including proposals to require that drug prices be included in drug television advertisements; to permit Medicare Part B to use step therapy protocols; and to significantly revamp how Medicare reimburses for Part B drugs that are infused in physician offices. Additionally, if there is an embrace of infrastructure, health care stakeholders can make a play to include funding for projects, such as broadband expansion, that would improve health care delivery.

Overall, a divided Congress and a focus on the 2020 election that will intensify by the day likely means the window for meaningful legislating in the incoming 116th Congress is quite small. Stakeholders seeking action on priorities will need to be aggressive in the weeks and months ahead — and be prepared for a number of potential scenarios.

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