PwC: What the midterm shakeup means for healthcare

After holding control of Congress for eight years and attempting to eradicate the Affordable Care Act dozens of times, Republicans lost the majority in the House on Nov. 6 during the midterm elections. The partisan shakeup could have several impacts on the nation's healthcare agenda.

Democrats, with a slim majority, likely won’t fully stop the Republican healthcare agenda, but will slow it down, according to a recent report from PwC. Democrats won’t have overwhelming power in the house to strengthen the ACA and Medicare and Medicaid, expand consumer protections and use the federal government to provide relief to consumers facing high healthcare costs.

Likewise, the changeover also means Republicans won’t be able to mount another attack at the ACA to overturn it. But the Republican agenda will continue outside of the legislative authority.

President Trump and the administration will continue to dismantle what they can of the healthcare law and “utilize regulatory agencies in an attempt to transform Medicaid, roll back industry regulations, address drug pricing and streamline reviews of medical products,” PwC predicts.

What to expect

There are a number of actions that healthcare providers and stakeholders can predict from the current administration, even with Democrats in control of the house.

For one, a new emphasis on transparency has risen from both sides. Pharmaceutical companies may be required to display prices on TV ads, if a new rule is finalized. With more Democrats in control of gubernatorial seats, states may be more likely to adopt legislation that calls for further transparency around drug prices.

In fact, the stalemate in Congress currently means that states are much more likely to implement change in healthcare policy.

“Right now, the House and Senate are dysfunctional and unlikely to pass much in the way of major healthcare legislation,” Tom Kise, director of public affairs for Washington, D.C.-based United States of Care, told PwC’s Health Research Institute (HRI). “In contrast, most state governments have legislators who still work together.”

ACA changes, federal oversight

The midterms also brought about a new wave of Medicaid expansions in three states––Idaho, Nebraska and Utah.

It is expected that despite this expansion of Medicaid, the Trump administration will continue to make changes to Medicare and Medicaid, including allowing more states to implement Medicaid work requirements. In addition to expanding short-term health plans, the administration will seek to undermine the healthcare law through regulatory means, as federal agencies like HHS will continue to have more oversight and strength.

“I think that the administration will continue to look for ways to aggressively chip away at the Affordable Care Act,” Ceci Connolly, president and CEO of the Washington, D.C.-based Alliance of Community Health Plans, told HRI. “There’s a possibility that if you have Democrats in control of at least one chamber, there will be a check on that through the investigative and appropriations process.”

However, with more control, Democrats may be able to have more oversight of federal agencies, including questioning Medicaid work requirements. Democrats will also have greater input when it comes to the federal budget, which could include more resources dedicated to the ACA individual markets. In the 2018 budget, Republicans brought down the penalty in the individual mandate to $0, effectively eliminating the ACA provision.

States, in this case, may also step in here. Several Democratic states have already sought to fortify their markets with reinsurance programs. In particular, Maryland will see a dramatic drop in average ACA 2019 premiums thanks to its reinsurance program, according to PwC.

“The efforts to shore up the individual marketplaces are important for anyone who wants or needs comprehensive health coverage,” Maura Calsyn, managing director of health policy at the Washington, D.C.-based Center for American Progress, told HRI. “It is encouraging to see what states are doing, but states aren’t able to make up too many losses in federal support on their own.”

At least three states, New Jersey, Vermont and Massachusetts, have implemented their own individual mandate penalties to replace the lack of a federal one. A handful of other states have enacted their own bans on Trump’s short-term limited-duration health plans that don’t comply with the ACA.

Economic trends

Lawmakers on both sides of the aisle will need to take a hard approach to rising healthcare costs, which are expected to continue climbing in the future. In addition, each side will have its own agenda when it comes to the economics of Medicaid, Medicare and Social Security.

Several initiatives, including Medicaid work requirements, could impact the number of uninsured Americans, which has remained steady around 8.8 percent since 2016. But both parties are seeking ways to make care more affordable for Americans through their various agendas.

However, most account holders of Health Savings Accounts fail to make the maximum allowed contribution each year, meaning the policy of expanding contributions won’t help consumers very much.

Still, opportunities exist to lower the uninsured rate, control healthcare spending and improve health outcomes. The outcome of the most recent election won’t stop the transition to value-based care, and 2019 and 2020 may look similar, as “the next two years may be more of a seamless transition from the previous two,” the report concluded.

PwC’s Health Research Institute interviewed healthcare advisors and association executives, as well as surveyed 1,500 American consumers in September about healthcare policy issues.