Earlier this week, former President Trump secured a decisive victory over Vice President Kamala Harris in the race for the White House. Republicans also successfully flipped the Senate, and, as of this writing, appear likely to retain control of the House of Representatives. GOP control of both the executive and legislative branches clears the way for more sweeping Republican reforms, in both healthcare and elsewhere. So what do we expect Trump's health policy agenda to look like?
Read on to get our take, and register for our upcoming webinar (next Thursday, November 14th at 1 PM ET) where we'll break all of this down in more detail.
What's NOT likely to be on Trump's health policy agenda: Significant cuts to popular entitlements
Let's start with what we don't expect to make the cut:
Major reforms to Medicare
Why we believe this: Trump stated repeatedly on the campaign trail that he would not cut Medicare or Social Security. A clear exception to this would be moves to reduce consumer OOP exposure—for example, he continued to express support for provisions to reduce the prices of Medicare drugs. Another reason to believe we won't see significant cuts? The Medicare Trust Fund is in relatively good shape. The outlook for solvency has improved in recent years and, as of the Congressional Budget Office's latest projections, climbed out of the single-digit "danger zone" that has prompted major Medicare reforms in the past.
A possible wildcard: While Trump never endorsed a sweeping expansion of Medicare benefits the way Kamala Harris did (via her plan to expand Medicare coverage for home-based care), the former President has expressed a desire to help seniors age in place and proposed the idea of offering tax credits to support long-term caregivers. So there's an outside chance he could actually take some incremental steps to expand the Medicare entitlement.
A return to (2017-era) Repeal and Replace
Why we believe this: The former President's own language on the ACA has softened significantly since 2016 and 2017. In fact, he stated on the campaign trail that unless a better plan presented itself, his approach would be to run the ACA as effectively as possible. Repealing the law would also require Republicans to complete their sweep of the legislative and executive branches by taking the House, and, even in this increasingly-likely scenario, the political complexity of achieving a full repeal is even more complicated than it was back in 2017. Public popularity of the ACA has never been higher: as of this year, 62% of adults have a favorable view of the law, compared to just 43% in 2016. And with an additional seven years of implementation now complete, repeal of the law would represent even more significant disruption for industry stakeholders and patients. For example: as of this year, 41 states have expanded Medicaid and over 21M Americans receive insurance through the public exchanges (in 2016, those numbers were 31 and 12.7M, respectively).
A possible wildcard (or two): While we don't think an exact (or even close) replica of the 2017-era repeal and replace legislation is likely to revive itself, the incoming Trump administration could, especially alongside a Republican-controlled Congress, attempt to "refine and reform" the law through more incremental changes—and could even ostensibly brand those efforts as a version of "repeal and replace." One near-term decision the administration will face: the enhanced subsidies for the individual exchanges implemented under the Biden administration are set to expire at the end of 2025. Will Trump extend those subsidies, given their popularity, or allow them to expire?
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What could be on Trump's health policy agenda: Eight issues we're watching
Drug pricing
Why we're watching this issue: Trump has supported many of the same drug pricing policies implemented by the Biden-Harris administration, such as the drug price negotiation model that was passed as part of the Inflation Reduction Act. He has also historically been willing to break from the traditional faction of the Republican party in supporting these types of policies. What's unclear now that he has won reelection is whether he will continue to support these policies given their association with the former administration—and if so, how strong that level of support will be.
What to watch for: Some Republicans have called for the repeal of the IRA. If Republicans retain the House, would President Trump support such a move, push back on it, or endorse a more piecemeal approach (for example, repealing the climate change and energy provisions of the IRA but leaving the drug price negotiations intact)? And if Republicans retain the drug price provisions of the IRA, will the Trump administration simply implement the law as written or attempt to build on, expand, or accelerate the previous administration's approach?
PBM reform
Why we're watching this issue: This has been a growing bipartisan focus within Congress, and is expected to have Trump's support, although he did not discuss PBMs explicitly on the campaign trail. In particular, lawmakers on both sides of the aisle have called for tighter regulations on PBMs in order the increase transparency into their pricing practices—a move that President Trump would be unlikely to oppose.
What to watch for: Despite strong bipartisan support, the chaos of the budget negotiation process in recent years has prevented PBM reforms from making their way into any spending bills. Is it now high enough on the priority list to make into the 2024 year-end spending bill?
Medicare Advantage
Why we're watching this issue: The previous Trump administration was decidedly pro-MA. In 2019, Trump passed an executive order with the explicit goal of expanding MA. His administration subsequently worked to increase telehealth access and enhance supplemental benefits within MA. This is in contrast to the Biden-Harris administration's approach, which decelerated MA reimbursement and made reforms to the star ratings and risk coding systems that negatively impacted MA plan reimbursement. We're not the only ones who believe a Trump administration will be friendlier to MA plans: MA insurers saw an immediate and massive jump in share prices following election night. What to watch for: Who will the Trump administration tap to run HHS and CMS—and could they even choose a former health insurance executive? And how much will relief on the reimbursement side of the equation actually lift MA plan economics? It’s unclear to what extent MA insurers’ current financial woes are due to revenue-side challenges (i.e. declining reimbursement) vs. cost-side challenges (e.g. increasing medical costs, increased use of supplemental benefits).
Medicaid
Why we're watching this issue: Medicaid reform was a cornerstone of the 2017 efforts to repeal and replace the ACA. Though those efforts were ultimately stymied, the Trump administration did move forward with some of the Medicaid provisions of those proposals (e.g. work requirements, block grants) via the 1115 waiver program. These provisions largely proved either unpopular and/or unsuccessful, with limited uptake, significant legal challenge, and/or lackluster results—making it unclear whether the incoming administration would want to revisit those policies. That said, Trump has made no promises NOT to cut Medicaid in the way that he has for Medicare and Social Security. And it’s possible a Trump administration could pursue other measures designed to limit Medicaid enrollment and spending, such as stricter eligibility checks or reforms to the federal matching system.
What to watch for: Does there appear to be any renewed interests in revisiting either work requirements and/or block grants? Or will the administration look to a different toolset for limiting enrollment and spending this time around?
Value-based care
Why we're watching this issue: Once an area of strong bipartisan support, value-based care lacks a clear political champion on either side of the aisle these days. Under the Biden-Harris administration, the push toward value-based care has increasingly taken on a grants-like approach, with much more emphasis on improving quality than controlling spending. A Trump administration is unlikely to abandon value-based care altogether, but is also unlikely to aggressively champion it, and could take a harder-edged approach to ensuring that any new or existing programs are delivering cost savings to the federal government.
What to watch for: Who is ultimately tapped to lead CMS and CMMI? This will be significant as this is not an area that Trump himself is likely to directly influence at any level of detail.
Antitrust
Why we're watching this issue: The historical gap between the left and right on antitrust has closed somewhat in recent years. The previous Trump administration took a harder-edged approach than prior Republican administrations. This was particularly true when it came to Big Tech, and during the prior Trump administration, the FTC even attempted to take on a major vertical merger in the AT&T and Time Warner case. Vice President-elect JD Vance has also been a vocal proponent for more aggressive antitrust measures and has actually praised Biden-appointed FTC chair Lina Khan for her approach. By many measures, Khan has been one of the more influential FTC chairs in recent memory, leading the FTC to block more mergers outright, as opposed to pursuing structural remedies after the fact. This has had a clear cooling effect on the M&A landscape, with a larger number of transactions proactively abandoned due to antitrust concerns. Within the healthcare sector specifically, lawmakers and regulators have expressed concern about increasing levels of vertical consolidation and the growing prevalence of "single points of failure" within the system.
What to watch for: Despite Vance’s praise of Kahn, it’s not unlikely that she will be replaced by the incoming administration. Who will she be replaced with, and will they carry on her more hard-edged approach?
Reproductive health
Why we're watching this issue: Trump broke with the GOP party line by vowing NOT to sign a national ban on abortion, but that doesn’t mean that a Republican-led Congress couldn’t test the waters by sending such a bill to his desk. Even absent this sort of sweeping action, a Trump presidency could limit abortion access in other ways (for example, through broader religious exemptions or limitations on mail-order abortion pills). Trump has also vowed to protect access to IVF services, but has signaled greater receptivity to limitations on gender-affirming care, especially for minors.
What to watch for: This is an area where the outcome of the House races really matters. Would a Republican-controlled Congress send a national abortion ban to Trump’s desk, despite his promises on the campaign trail? Or will they focus on more targeted limitations, rather than sweeping action?
Public Health
Why we're watching this issue: Trump has continued to express his opposition to vaccine and mask mandates. He has also pointed to Robert F. Kennedy Jr. as a possible healthcare lieutenant (although his campaign has also been quick to note that he will not be at the helm of HHS). Kennedy has been a vocal vaccine skeptic and could support measures to reduce the recommended vaccine schedule and/or decrease liability protection for drug companies in vaccine development. Beyond the issue of vaccines, Trump has also spoken vocally about the need to enhance focus on preventing and managing chronic disease, although it’s not yet clear how his administration might approach these goals.
What to watch for: Who sits at the helm of HHS, CMS, the FDA, and the CDC will be hugely impactful here, as would any changes to the structure of those agencies (particularly the CDC and FDA).
Parting thoughts: The philosophy underpinning Trump's health policy agenda
Overall, a second-term Trump administration is likely to view healthcare as a means to grow the overall economy, and with a few notable exceptions (drug pricing, Medicaid), is unlikely to look to cut spending in any significant way. That is especially true as it relates to popular entitlements like Medicare and Medicare Advantage.
In instances where the administration might look to at least constrain spending growth, there is a clear preference for market levers as opposed to outright spending controls. And the incoming President is likely to position the government as a sort of contractor vis-a-vis healthcare, embracing an outsourcing-type role (for example, by growing Medicare Advantage).
Want more on the results of the election and Trump's health policy agenda? Join us next Thursday, November 14th at 10 AM PT | 1 PM ET as we break down these issues live. Register here.
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