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How Will Election Results Affect the Healthcare Agenda?

On Saturday, November 7, four days following Election Day, the presidential race was called with Joe Biden becoming the 46th president of the U.S. The ‘blue wave’ of Democrats taking more seats in Congress did not happen, which will likely limit President-Elect Joe Biden from taking bold action on his key healthcare policies.

Below are a few thoughts on how the Biden presidency may affect healthcare policy for at least the next election cycle.

General Overview

With Georgia’s senate runoff on January 5, President Biden will most likely be contending with a divided Congress or a laser-thin majority for Senate Democrats. Biden would likely need to rely on the regulatory system to drive a bulk of his aggressive healthcare agenda. The Supreme Court could play a large role in Biden’s ability to put his agenda into practice. In addition to the Supreme Court’s new 6-3 conservative majority, there are far more conservative appeals court judges now than during Obama’s administration.

The COVID-19 pandemic and the eventual ruling by the Supreme Court on the Affordable Care Act will be on top of the immediate healthcare agenda. The federal government may take a more active role in responding to the pandemic and rely less on states to manage it.

COVID-19

Though lawmakers failed to pass another major stimulus package after months of negotiations before the election, talks are likely to resume. Biden will attempt to de-politicize the Centers for Disease Control, which was the world’s leading public health institution. Additionally, Biden could work to reconstruct international cooperation on fighting pandemics, something that has been missing since COVID-19 began. Providing consistent and evidence-based guidance to states and the public on how to mitigate the COVID-19 epidemic will also be extremely important.

Affordable Care Act (ACA)

The Supreme Court (SCOTUS) heard oral arguments yesterday, November 10, on California v. Texas. The decision may not come until next June, but the case will determine the fate of the Affordable Care Act. There are so many legal tentacles to this case that it will be difficult to predict the final outcome. Yet, despite SCOTUS’ conservative leanings, many are led to believe it will be unlikely the country’s highest court will strike down the ACA in its entirety. There are at least two key issues relating to any SCOTUS decision:

  1. MANDATE: Republican attorneys general challenging the law argue that, by zeroing out the individual mandate’s tax penalty, Congress has invalidated the law.
  2. SEVERABILITY: The key question is whether the mandate can be severed from the law if the mandate is no longer valid. If the justices rule it is not severable, the whole ACA would be invalidated.

Public Option

Given the likelihood congress will remain divided, primarily with the Senate leaning Republican, there’s no chance of passing Biden’s platform proposals for expanding health insurance coverage. Senate Republicans have zero interest in a public option for insurance exchanges or lowering the age for Medicare eligibility to age 60.

Depending on the outcome of the SCOTUS’ decision on the ACA, Biden may attempt to enroll more people in health coverage under the ACA marketplaces, by possibly creating a special enrollment period for uninsured people to sign up for coverage as well as increase spending on marketplace advertising and outreach. Allowing family members of people with low incomes to get marketplace subsidies is on Biden’s wish-list.

Market Concentration

The Democratic platform calls for a retroactive review of some mergers and acquisitions approved by the Trump Administration. Without needing congressional approval, the Biden administration can influence past M&A activity. Candidate Biden has pledged to aggressively use antitrust authority to tackle market consolidation in healthcare and scrutinize future acquisitions based on impacts to prices and competition, in addition to labor markets, low-income communities and racial equity. States, however, still have significant discretion over which deals are approved. This will be one area to watch under the Biden Administration.

Drug Prices

Both parties seem to be in agreement that skyrocketing drug costs of specialty drugs and new drugs coming on the market threaten to bankrupt the system. Yet pharmaceutical companies and their powerful lobbying efforts have a proven track record in preventing bold measures to address high drug prices. With a divided Congress, the work of lobbyists will probably be less demanding.

Price Transparency Rules

Regarding Trump’s transparency agenda, it is uncertain whether Biden would concur with the hospital and insurer executive orders. One possibility would be to let the lawsuits by the hospital groups and potential insurer lawsuits play out in the courts. Perhaps the deadlines for hospitals and insurers to adhere to transparency requirements could be extended into the future.

Summary

Having a divided government will greatly temper any aggressive healthcare initiatives a Biden Administration will have in the next two-to-four years. SCOTUS’ eventual decision on the ACA will greatly determine health policy direction in the years ahead.

Finally, for all veterans of all branches: Thank you for your sacrifice, your bravery, and the example you set for our country.

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Supreme Smoke

Soon, we will be hearing from the U.S. Supreme Court on its’ interpretation of the health care reform law. Will it stay intact or will key features, such as the individual mandate and the expansion of Medicaid, be axed out as being unconstitutional? Or maybe the whole law will be axed?

Needless to say, watching for the Court’s upcoming decision is much like waiting for the black smoke signal to come from the Sistine Chapel at the Vatican (which means that a new pope has been elected). If we see white smoke, that means no decision has been made by the Court…causing even greater uncertainty. OK, maybe I am taking this analogy a bit too far, but hopefully you get my point.  This is a BIG decision – FOR ALL OF US!

Whatever the ruling, there will be great confusion for all employers. If the entire law is overturned, some interesting issues will most likely cause immediate alarm for employers and their employees.

One example is the $5 billion program under this law that partially reimbursed employers for the claims incurred by their early retirees (pre-Medicare eligible). This money has been distributed to employers who qualified for this reimbursement. If the law is thrown out, will those employers have to pay this money back? Don’t know. If so, this would be a very messy process.

The reform law also extended health coverage to employees’ adult children up to age 26 – generally effective on January 1, 2011. With this coverage, employees could add these newly-eligible dependents without being taxed for this additional coverage. However, if the law is overturned, this coverage may be considered taxable income to the employee – possibly requiring employers to send revised W-2 wage and income statements for 2011 to affected employees. Another messy process.

The above two examples portray a potential ugly retraction of provisions that have already been implemented since this law became effective in March of 2010. At this point, employers can only wait for the black (or white) smoke to appear.