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With the Midterm Election Over, Reports Assessing Healthcare Impact Turn to States

Allison Inserro
Despite impending changes in Washington, DC, as the Democrats are set to take over the House of Representatives in 2019, the divided federal government could lead to a spell of predictability for some healthcare sectors as most action shifts to the state level.
Despite impending changes in Washington, DC, as the Democrats are set to take over the House of Representatives in 2019, the divided federal government could lead to a spell of predictability for some healthcare sectors as most action shifts to the state levels.

Or at least that is what some stakeholders are hoping for, after the drastic changes in the payer market during the first 2 years of the Trump administration, according to a report released Wednesday.

However, some perennial issues, such as ever-rising costs and the impact of pharmaceutical prices on consumers, are bipartisan and will continue to generate discussion, said Benjamin Isgur, who heads PwC’s Health Research Institute (HRI), which released its analysis on the election results.

These are some takeaways from HRI, as well as from other reports about the impact on healthcare after the midterms:

More Focus on Pharma

Democratic-led states are more likely to require greater transparency from drug manufacturers around price increases, including action on pharmacy benefit manager rebates. Isgur called drug pricing a “bipartisan issue,” in terms of how rising costs affect constituents on both sides of the aisle.

As of September 2018, states considered 26 new drug pricing transparency laws; 8 were enacted, according to the National Academy for State Health Policy. The scrutiny could also extend to device manufacturers, HRI said.

Democrats could push to allow Medicare to negotiate with drug companies or open hearings on how Medicare pays for Part B drugs, said the Commonwealth Fund. They could also bring up anticompetitive practices that manufacturers use to delay or block competition of cheaper generic and biosimilar versions.

There could be additional action on opioid substance use disorders, including a move to boost funding for programs that were recently authorized, according to a Health Affairs blog post.  

Opportunities and Risks for Payers and Providers

The shift away from traditional fee-for-service healthcare delivery and toward value-based care will continue, albeit with a higher degree of risk for payers.  

There may be more opportunities for rewards based on performance in alternative payment models, HRI said. In addition, there may be more opportunity for bipartisan congressional conversation to restore Medicare Advantage quality bonuses.

As Medicaid expansion takes root in more states, an increase in the number of beneficiaries could increase revenue. But there are risks for payers if the population is sicker than expected, the report noted. More reinsurance waivers could stabilize insurance markets in new states that pursue them.

For providers, they may face the risk of uncompensated care as a result of skinnier plans encouraged by the Trump administration, or patients waiting to seek care until they are in crisis. They may need new practice infrastructure to comply with new opioid prescribing rules. They could see value-based payments rise or fall as they are pushed to assume more risk, HRI said.

The Affordable Care Act, Medicaid Expansion, and State Power

The Democrats now have a check in place on a full repeal of the Affordable Care Act (ACA), but the administration is likely to keep narrowing the ACA through regulation, as it has done for the past year.

At the state level, more capitols that now have a “D” after the chief executive’s name may take more action to protect consumers, such as by putting in place reinsurance programs (which have bipartisan support); limiting the effect of short-term, limited-duration health plans (STLDHPs) or barring them entirely; or enacting their own individual mandate penalty for not having insurance. The federal individual mandate penalty drops to $0 on January 1, 2019.

California, Hawaii, Massachusetts, New Jersey, New York, and Rhode Island have barred STLDHPs; other states, like Oregon, Minnesota, and Nevada, have limited them.

Democratic states are unlikely to pursue work requirements in Medicaid; gubernatorial wins in Maine, Kansas, and Wisconsin make it likely that Medicaid expansion will happen or, as in the case of Maine, will finally be implemented. (Maine voters approved the expansion, but outgoing Republican Governor Paul LePage refused to put it in place.)

Voters in Nebraska, Utah, and Nebraska approved Medicaid expansion, but voters in Montana rejected extending it after June 2019.

More Focus on Health Agencies

With Democrats taking over the House, they also regain key leadership positions on committees and will gain more authority to hold hearings on the administration’s actions and subpoena agency leaders. CMS is a likely target, according to HRI, especially as it considers additional Section 1115 Medicaid work requirement waiver applications. Those hearings could potentially happen alongside court cases in Kentucky and Arkansas over work requirements.

The FDA, which has bipartisan support, is not likely to see much impact, HRI said.

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