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“President-elect Donald Trump will likely enter the White House seeking to ‘repeal and replace’ the six-year-old Affordable Care Act (ACA).”
So reads the first sentence of the PwC’s Health Research Institute’s post-election report. The rest of this thoughtful and timely analysis—overseen by the Institute’s leader, Benjamin Isgur—explains why Trump probably won’t be able to do it—or at least not in the black-and-white terms the statement implies.
In an interview yesterday morning—before the first votes were counted—Isgur says that a “literal repeal” would likely be off the table almost from the start, if only for the sheer logistical hurdle it would involve. “Do you really go through more than 1,000 pages of law—more than 1,000 pages of law that has been turned into multiple thousands of pages of regulations over the last six years” and toss all that out overnight? “Some of those things have been quite popular with industry, some of it not so popular,” he says. “Some has been very popular with consumers, some not so popular. Does the Trump administration try to repeal every bit of it? I think that most people think that’s not very realistic.”
Instead, he predicts that Trump emissaries and Congress will negotiate something in the middle between full repeal and status quo. Any proposed change, of course, would face challenges from one entrenched stakeholder or another: Insurers would be happy to lose the taxes and fees assessed under the ACA, for instance, but don’t want to lose enrollees in health insurance exchanges or in Medicaid managed plans. Drug and device makers, likewise, might be thrilled to cast off a shackle of fees and regulations—but if the number of insured drops with the demise of Obamacare, so too would spending on meds. The same goes for individual mandates, employer mandates, subsidies, and so on. For every winner, there’s a loser.
But even apart from that win-loss calculus is simply the barrier of time. “The people who are running the large health systems, insurance companies, and pharmaceutical companies are pilots of these massive ships,” says Isgur. “They do not turn on a dime. “Many insurance companies took two to three years to get their exchange offerings up and running—to run the numbers, to think about how they were going to market and implement them.” And so, if Congress moves to repeal ACA, industry leaders will demand to know the timeline not only for unwinding this yarnball of a system, but also for rewinding that thread into something else.
Less discussed by the commentariat but important are Trump’s other claimed priorities in health reform: from the cross-state selling of insurance, to allowing Medicare to negotiation drug prices, to expanding health savings accounts. The PwC report offers perspective on all of it.
As for those who are wondering how Isgur and team predicted a Trump win in the first place, well, they didn’t. Ever since the 2000 presidential election, when George W. Bush faced off against Al Gore, the firm’s Health Research Institute has prepared two reports on the outlook for the healthcare industry—one for each candidate.
The Trump one was emailed to me at 2:52 a.m. this morning—when it was at last certain that this agonizing gladiatorial battle for the presidency was over. The other one, says Isgur, was fed to the lions.
