What Trump Administration Could Mean for ACA and Labs

Now that the election has concluded, labs and others in the health care industry have a new concern—what will the fallout be? President-elect Trump promised throughout the campaign to repeal the Affordable Care Act (ACA). Many have expressed concern about what will happen if he makes good on that promise.

In a Nov. 14, 2016 press conference, however, President Obama cautioned that "the federal government and our democracy is not a speedboat, it's an ocean liner" and it takes a lot of hard work and time to make major changes.

He also advised that the new administration must consider how various issues will play themselves out before committing to specific courses of action. He specifically mentioned doing away with Obamacare has been the "holy grail" for Republicans and advised that the new administration must take a look at the program and see what works before taking action. And already, it seems that President-elect Trump is doing just that, as he has indicated some measures initiated under the ACA will remain.

Immediate change faces significant hurdles
To demonstrate the ocean liner analogy that President Obama described, here are some challenges that will slow down any major changes:

• Filibuster. Our existing legislative processes do present a challenge to repealing ACA entirely. "One would assume once you have Republican control of both the House and Senate you should have an easier time enacting legislation," said Bill Hoagland, senior vice president of the Bipartisan Policy Center. But he explains that while the Republicans have control of both the House and the Senate, there are fewer than 60 Republicans in the Senate which is the "critical number to overcome a filibuster." "There is a firewall or a check and balance against policy," he explains. Thus, any action taken through a regular process will require some bipartisanship, he explains, particularly in the Senate.

• Unpopularity. Not only does President-elect Trump enter the office with a low popularity rating —as evidenced by demonstrations in which many constituents angrily declare he is "not [their] president" —but the members of Congress are also plagued by popularity woes, with a November Gallup poll showing only 11% of Americans approve of Congress. The silver lining is that this unpopularity could be an incentive for both sides to work together, suggests Hoagland.

• State insurance role. One of the proposed changes to health care insurance is to allow insurers to sell across state lines. Hoagland points out, however, that state policies could be a stumbling block—state insurance commissioners set rates and policies. Additionally, there is concern that such sales could create a race to the bottom, he adds.

• Packed agenda. "Congress has a lot on their plate," notes Hoagland. As he discussed in his keynote presentation at G2's recent Lab Institute in Washington, D.C. the federal debt limit comes up in March—requiring Congressional attention—and Congress also will need to address Supreme Court, Cabinet and other appointments. That packed agenda could delay or slow down any legislative action with regard to health care.

Hoagland does anticipate there will ultimately be a more active legislative agenda in the new administration with efforts in both the house and senate to make major changes to the ACA and tax reform. "It won't be as quick and as fast as Mr. Trump thinks it will happen and that will hopefully afford an opportunity for a more bipartisan approach."

Complete repeal already scaled back
Although significant details of any plan remain to be revealed, President-elect Trump has already stepped back from total repeal by indicating in an interview with 60 Minutes and in other statements that he intends to keep the ACA provisions concerning pre-existing conditions and children remaining on parent's health insurance until age 26.

It is also noteworthy that in a Nov. 21 video update about the policy plans for the first 100 days, President-elect Trump mentioned several initiatives his administration will tackle in the first 100 days with executive actions that will be implemented "day one." The only reference to health care at all came when he stated his agenda is based on a core principle of "putting America first" and making sure the "next generation of production and innovation" happen in America, whether it be "producing steel, building cars or curing disease"—and this statement was made in the context of creating jobs and wealth for American workers.

Budget reconciliation option for change
There is one alternate route to make changes more swiftly or easily for the new administration and that is the budget reconciliation act process—which only requires a simple majority, Hoagland says. He cautions that if that reconciliation path is used to repeal the ACA without any democratic support it could cut a rough path forward for any policies approved in that process and highlighted the risk that lab copays could make a reappearance.

Alan Mertz similarly cautioned the attendees at G2's recent Lab Institute to watch what might be included in any budget reconciliation legislation that could impact labs.

Value focus unlikely to change
Another question on the forefront of laboratories and other providers is any potential impact on reimbursement reforms such as PAMA and MACRA and the shift to value-based health care delivery and payment models. "Republican and Democratic policy analysts [agree] that fee-for-service reimbursement system is part of the problem of cost escalation," responds Hoagland. He doesn't foresee a change in that focus on shifting from fee-for-service to value-based reimbursement. "It's hard to argue against paying for value."

Takeaway: Though change to ACA and health care systems may be coming, it may not come quickly or be as wholesale as promised or anticipated.