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Analysis

What Impact Will the Midterm Results Have on Healthcare?

By Jack O'Brien  
   November 19, 2018

Just two weeks after the midterm elections, analysts are speculating about what a divided government on Capitol Hill for the next two years could mean for the future of healthcare policy.

As Democrats regain control of the House of Representatives for the first time in nearly a decade and consider who will lead them, the healthcare industry is speculating what the midterm results could mean for the future of policy at the federal level.

Rep. Nancy Pelosi, D-Calif., who is likely to reclaim her gavel as Speaker of the House, said that Democrats ran and won on healthcare during the most recent election cycle, which will likely influence the direction of their policymaking starting in January.

Related: Healthcare Winners and Losers from Election Night 2018

However, the Republicans still maintain control of both the White House and Senate, setting the stage for consequential healthcare policy proposals, such as revising various aspects of the Affordable Care Act (ACA), approaching opioids legislation, and lowering prescription drug prices to be handled by a divided government.

Don't expect much healthcare legislation to pass

John Kelliher, Managing Director of Berkeley Research Group, told HealthLeaders that divided government has historically been good for the healthcare industry, especially when Democrats gain relative power, but doubted much legislation will pass in the upcoming Congress.

"I think it's highly unlikely that in the next Congress there'll be any meaningful healthcare legislation," Kelliher said. "I just don't see [Senate Majority Leader Mitch] McConnell, [Rep. Nancy] Pelosi, and [President Donald] Trump coming together. I also think if you're a Democratic senator that's thinking about running for president, you probably would just as soon not have too much compromise, so it doesn't really seem to line up for much activity in the next few years."

Kelliher, who previously served as chief counsel to the House Committee on Ways and Means from 2001 to 2003, said Democrats will likely hold congressional hearings on prescription drug prices and Medicare reform to command attention in leiu of not being able to push forward their legislative goals.

He also said that the future of healthcare legislation is more likely to be influenced by the 2020 elections, when the House, Senate, and White House are up for grabs.

On the one hand, if Democrats take back majority control of government in win it all in 2020, Kelliher said will likely look at expanding the healthcare system on top of the ACA and push that as their type of Medicare for All solution.

On the other hand, if Republicans maintain their majority or expand on it in the next election cycle, Kelliher believes that the party will likely look at reforming the entire Medicaid system and cut federal spending.

Areas for compromise remain few and far between

The partisan split between healthcare policy goals is likely to hinder any serious effort between Republicans and Democrats to strengthen or weaken the ACA when the new Congress convenes, according to Kelliher.

On the few areas where he thinks Republicans and Democrats can coalesce support, Kelliher pointed to continued action on substance abuse issues.

He identified opioids legislation, such as the one passed last month, as the most obvious area of joint interest but expressed skepticism that there could be a similar bipartisan effort to rein in high prescription drug prices.

Despite shared rhetoric about seeking to hold pharmaceutical manufacturers accountable and protect consumers, Kelliher believes the policy matter at hand is difficult to grasp and that the gap between proposals to achieve lower drug prices is currently too wide.

Hector De La Torre, executive director of the Transamerica Center for Health Studies (TCHS), a national non-profit, told HealthLeaders that revisiting the Alexander-Murray ACA stabilization bill from last year could be an area where both sides could achieve beneficial trade-offs.

"That seems to be something promising where both sides would get something out of it," De La Torre said. "It's clearly not repeal-and-replace, but as we saw with the president's moves on moves on short-term policies and association health plans, he took credit for essentially doing a repeal-and-replace by allowing those plans to be alternative to the ACA. [Republicans] could claim victory with some regulatory easing."

More executive action on healthcare likely

As a result of advanced partisanship in recent years, both President Trump and former President Barack Obama relied on executive actions to affect healthcare policy changes, something that both Kelliher and De La Torre expect to occur with increasing frequency in 2019. 

Kelliher said the Trump administration, despite failing to repeal and replace the ACA, has already acted boldly on healthcare initiatives in its first two years and is likely to become even more emboldened to act moving forward.

The beginning of a divided government will also coincide with the HHS Secretary Alex Azar's one-year anniversary as head of the department, someone who Kelliher said is feeling more comfortable in his position and operating with a greater license to pursue additional policy changes.

Citing action on topics such as reforms to the Medicare payment system, hospital outpatient rule, and skilled nursing payment system, Kelliher expects the Trump administration to next enact changes to the much-maligned and oft-discussed 340B drug pricing program.

Related: The Healthcare Leaders Elected in the 2018 Midterms

Jack O'Brien is the finance editor at HealthLeaders. 

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