Benefits-industry experts say that Donald Trump’s nomination of U.S. Representative Tom Price (R-Ga.) as his health and human services secretary shows just how serious the President-elect is about repealing the Affordable Care Act. With Price — an outspoken Obamacare critic who has introduced legislation to replace the law — at the helm, the conversation becomes less about if a replacement is coming, and more about exactly what that replacement will be.
And for a number of employers who were unhappy about the fact that the Affordable Care Act did little to address rising healthcare costs, the nomination comes as a promising development.
The good news about the Price nomination, says Mike Thompson, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, is the potential for a “thoughtful relook” at healthcare reform.
“We have an opportunity to look at how we do it,” he says, noting that employers and other key industry stakeholders can speak up to the administration about their thoughts on what a replacement should look like. “Many of us are thinking that a thoughtful look at healthcare costs would be the best thing to do.”
The Society for Human Resource Management, for one, will “continue to work with the new administration and Congress in support of reforms that lower health care costs and improve access to high-quality and affordable coverage,” says Chatrane Birbal, the group’s senior adviser, government relations.
The new health reform conversation has to involve more than just access to healthcare; it must include a discussion about how to address healthcare costs, adds Brian Marcotte, president and CEO of the National Business Group on Health.
“If this is just a refocus on access — which is what the ACA primarily was — if it’s not going to delivery system transformation and value-based care, that’s a concern.”
Rajeev Singh, CEO of Accolade, a healthcare concierge company, agrees that healthcare costs need to be addressed.
“Ultimately, the No. 1 challenge facing employers today is they want great outcomes, but they want costs to stop going up at such a rapid pace,” Singh says. “If you look at the last 25 years, the expansion of medical costs as a percentage of our GDP is astronomical. It’s gone from somewhere in the neighborhood of 10% of GDP to 19% of GDP in that timeframe. When you think about that in the context of American business, you’re seeing the challenge associated with being competitive in a global marketplace. We spend more as a percentage of total revenues on healthcare than companies in other countries do.”
Wait-and-see approach
Industry experts say that although they expect Trump and Price to significantly alter the ACA, employers shouldn’t make big changes or throw out compliance plans just yet.
“I think [Price’s appointment] shows a seriousness [about] at least repealing key parts of the ACA. No. 1 on the list to go first I think is the Cadillac tax,” Marcotte says. “I also think the employer and individual mandates would also be on the docket, as well as the federal subsidies. There’s a lot that’s unclear [about] how that would be done, but there is a seriousness here with [Trump] appointing Price.”
Though potential overhauls could mean a big change for employer strategy, a wait-and-see approach — again — is in order for employers, Thompson says. “Even if President-elect Trump and Price have a clear vision on where they want to go, there are a lot of key stakeholders that are going to weigh in over the next few years,” he says, noting that Trump has “made a point that he won’t leave people in the lurch in the meantime.”
“It’s wait-and-see because until you see the devil in the details, it’s hard to react to anything other than the high-level banter about replacing and repealing,” Marcotte adds.
Additionally, industry experts note, the new administration might keep some provisions of the ACA. Trump, for example, has said he wants to keep the law’s pre-existing condition exclusion provisions and coverage of children to age 26.
And, as Singh notes, other aspects of the law might stay as well once Trump takes office.
“What we’re also seeing is that the President-elect is embracing some elements of the Affordable Care Act that previously he might not have embraced,” Singh says. “What will the ultimate outcome of the Affordable Care Act be in the new administration? Even that we’re not 100% certain of.”
Some concerns
Though the ACA is top of mind with Price’s nomination, employers are watching other issues as well — some with reservation.
Price’s selection, Marcotte says, “likely means that Medicare payment reforms will get a second look and may advance a little more slowly. And I think that concerns us a little. We would hope that HHS would continue to transform Medicare away from fee for service, which drives unnecessary care and spending, toward paying for value. And we’d like to keep our foot on the gas when it comes to transforming the delivery system and not lose momentum there. That’s the one bit of uncertainty.”
Another concern is just how Price’s bias against federal oversight and federal regulation may impact employers and their benefits plans.
“He’s very state-oriented,” Thompson says. “And with major employers, there’s a concern with this. [Changing federal oversight] can cause questions about how their healthcare is regulated, how their benefit plans might be influenced and how the dismantling of ACA plays into this. It could get replaced with 50 different versions of ACA, and that would be a concern.”
Giving states more control increases the “complexities of consumers who may be working across state lines,” Singh says.
“It creates the opportunity where medical systems, payers and others will have a more complicated web of networks that consumers have to navigate,” Singh says. “That puts the onus on us to make sure we understand that new web exceptionally well, because it’s our job to make sure the consumer doesn’t have to.”
Additional reporting by Amanda Eisenberg.
