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Donald Trump wins

November 09, 2016

Following 18 months’ divisive and frustrating campaigning, Donald Trump has won the election. Trump’s presidency represents an opportunity to repeal the Affordable Care Act while working with employers and the health insurance sectors to replace it with tax-free health savings accounts (HSAs). Trump indicated as much throughout the campaign. His official platform on healthcare promised to “broaden healthcare access, make healthcare more affordable, and improve the quality of the care available to all Americans.” What can we expect from President Trump?

First, it’s important to remember that Trump is and always has been a corporate magnate. His attempts to replace the ACA will be favorable to employers, relieving them of the need to comply with as many regulations as possible and reducing their costs as much as possible. HSAs put the onus on the employee (or health plan member) and feature high deductibles. Although the tax-free (pre-tax) nature of HSAs is appealing to middle- and high-income Americans, it is of little value to the vast number of Americans living paycheck to paycheck. Cadillac plan taxes (i.e., proposed 40% excise tax on high-cost employer-sponsored plans) are likely to vanish in the process. The difficulty with President Trump’s plan is that his promised tax breaks for corporations and the wealthy as well as the tax-free HSAs will gut the healthcare budget dedicated to Medicare and Medicaid.

What his campaign specifically promised was that Americans would be able to buy health insurance coverage across state lines. Although this approach can stimulate competition, the advantage will clearly go to the very largest insurers and spur more mergers and acquisitions among insurers, ironically reducing choice in the long run.

I expect that President Trump will have the following impact on the health insurance and healthcare landscape:

  • Medicaid—Trump is likely to discontinue Medicaid expansion as a function of the ACA and instead support plans to render Medicaid a block grant program, giving states an annual budget to manage however they see fit. This approach would be unencumbered by federal rules and regulations and would instead rely on free-market principles to foster innovation and cost savings. What states might do with Medicaid block grants is entirely unknown and unpredictable and will depend largely on governors and legislatures. National standards for health information, as well as outcome and quality measures, would become obsolete under this plan.
  • Stigma—President Trump aims to reduce or eliminate the emerging requirements that health policymakers recognize and normalize mental health and substance use disorders, ensuring the rights of people with respect to health insurance, treatment, housing, employment, and interactions with law enforcement. His emphasis on requiring that people work and pay into their benefits would be encoded in policies like requiring Medicaid enrollees to pay a portion of their premiums, and recent efforts by President Obama to close private prisons would be reversed. Under this plan, the incarceration of repeat drug offenders and people with mental illnesses could increase dramatically.
  • Integration—President Trump can be expected to leave efforts to integrate health, behavioral health, and social services up to free-market forces.
  • Women—President Trump will stand behind efforts to defund women’s preventive healthcare providers like Planned Parenthood.
  • Intellectual and developmental disabilities—It is too soon to tell how President Trump will approach and serve the needs of individuals with intellectual and developmental disabilities. It is likely, however, that recent legislation and regulations to ensure home and community-based services while shuttering workshops would be rolled back.

From an enforcement standpoint, President Trump will ensure that control is as local as possible. His promise to dismantle the ACA and create business-friendly, state-controlled conditions is a safe bet. Enforcement of the Mental Health Parity and Addiction Equity Act (MHPAEA) and the Olmstead Act is questionable and unpredictable. What is known is Trump’s disdain for federal rules and regulations in favor of state controls and enforcement.

In conclusion, President Trump can be expected to work with interest groups, including the largest employers, health insurers, chambers of commerce, medical device manufacturers, and pharmaceutical companies. Turning this large proportion (18%) of America’s gross domestic product (GDP) over to the free market is an exciting development for Trump’s supporters who believe that the free market will stimulate innovations and that competition will be what drives down prices.

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