Thornton Kirby: On the Election

A new day for America, a new direction for health policy.

Congratulations to Donald Trump, who will become the next President of the United States of America. Like many observers who relied on polls and political forecasters, I was surprised by the early election returns. I was even more surprised that Trump beat Clinton in so many of the key battleground states. My greatest surprise, however, came when I learned the Republicans had swept both houses of Congress in addition to winning the Presidency.

Despite the shock and disappointment associated with this election (which was inevitable for one of the major parties), Americans woke up this morning and made their coffee, took their kids to school, and headed to work. Sure, the water cooler talk and social media will be intense today, but I’m proud to live in a nation that honors the democratic process. To her credit, Hillary Clinton graciously conceded the race and signaled to her supporters that it’s time to help the new President move forward in 2017. I join our newly elected President in hoping for reconciliation as we forge a new path for America.

It was truly an historic election, and the results suggest major changes in store for our nation over the next few years. There will be plenty of political analysis in the weeks leading up to Inauguration Day, and an equal amount of speculation about Trump’s policy agenda for the next two years (and his first 100 days in particular). I don’t feel qualified to offer opinions on those subjects. But I do feel compelled to help you think about what the 2016 election means for healthcare policy in South Carolina. So I offer you the following thoughts.

First, the big picture. The Republicans have won control over Congress and the White House, and presumably the Supreme Court as well. Their victory is reminiscent of the Democrats’ position following Obama’s first election. And you will remember what happened in Obama’s first two years in office: the Affordable Care Act (ACA) was passed by the Democrats over the strident objections of Republicans, who have vowed ever since to repeal it. The Democrats only managed to enact the ACA (“Obamacare”) because they held slim majorities in the House and Senate. They used a procedural strategy known as budget reconciliation to pass the controversial bill, and Republicans took note. Now Republicans have a chance to repeal the law through the same budget reconciliation process.

But will they?

For Donald Trump, “Repeal and Replace” was not merely a health care platform, it was a centerpiece of his campaign. For him to abandon that strategy now would be unthinkable. In fact, repealing Obamacare will likely be one of his top priorities for the first 100 days he is in office. Often called the “honeymoon period,” the first 100 days is when Congress is most likely to give the new President an easy win on a campaign promise. I don’t see the Democrats giving Trump an easy road to repealing the Affordable Care Act, but I definitely see Trump making it one of his early priorities. He has promised even to convene a special session of Congress for this express purpose.

For Republicans in Congress, the prospect of repealing Obamacare is probably making them feel lightheaded this morning. But the election hangover will eventually wear off, and that’s when more sober political calculations must take place. Because so many Americans have benefitted directly from the Affordable Care Act (children on parents’ policies until age 26, no more pre-existing conditions, no more annual or lifetime caps, etc.), outright repeal of the law would constitute one of the greatest withdrawals of government benefits ever undertaken. Experts estimate that repealing Obamacare would mean 20 million Americans would lose their insurance or some coverage-related benefit. That’s a lot of voters, and members of the House of Representatives have to run for re-election again in just two short years.

In addition, 31 states have expanded their Medicaid programs, and repeal of Obamacare would threaten the federal funding that prompted those states to expand. The states could maintain their expanded eligibility, but the federal government would not provide the anticipated financial support.

So while repeal is enticing, it will not happen easily.

Here are several other health-related issues to watch, based on Trump’s statements during the campaign.

  • Individual mandate. Repealing Obamacare would end the individual mandate, and that would likely destroy the health insurance exchanges. Many are on life support now because health insurers have exited the exchange marketplace.
  • Block grants. Trump would prefer to fund Medicaid through block grants rather than the expansion strategy championed by Obamacare.
  • Health Savings Accounts. Trump would promote wider use of HSAs, but this strategy obviously would not replace the broader coverage strategies in the Affordable Care Act.
  • Prescription Drug Prices. Trump says he would remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products.
  • Behavioral health. Trump would “reform programs to give families the information and tools they need to help their loved ones.” While this language is vague, at least he acknowledges the need to focus on behavioral health.

I hope you find these thoughts helpful as you formulate your initial reactions. As we learn more about what this election means for the healthcare industry in South Carolina, we'll continue to share it.