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Risk in Context

US Health Care in 2017 and Beyond: The Aftermath of the Presidential Election

Posted by Mark Karlson November 21, 2016

In 2010, President Obama and a Democratic majority in Congress passed the Affordable Care Act (ACA), which fundamentally changed the US health care industry. Now, with Republicans soon to control the White House, the Senate, and the House of Representatives, President-elect Donald Trump’s promise to repeal or substantially reform the landmark law could become reality. So what does the future hold for the US health care industry?

Obamacare’s Impact

Over the past six years, the ACA has:

  • Increased mandatory health insurance benefits.
  • Expanded Medicaid funding patterns.
  • Reformed health plan pricing, benefit requirements, profit caps, and federal reporting requirements.
  • Reshaped the competitive marketplace due to significant merger and acquisition activity.
  • Made health care distribution models more consumer-friendly.

During the presidential campaign, Trump discussed everything from complete repeal of the ACA to removal of interstate insurance barriers, steps to improve competition between insurers, changes to Medicaid funding, expansion of tax-free health savings accounts (HSAs), and making health coverage tax-deductible when it is purchased in the individual market. Since the election, however, Trump has said he may favor keeping some of the ACA’s more popular requirements.

When Could We See Changes?

Many Americans have already enrolled in health coverage for 2017, making it unlikely that major changes in the health insurance marketplace will take place immediately. However, if Medicaid funding is changed in 2017 and individuals who currently receive significant governmental funding assistance lose that benefit, it is possible that exchange-based individual enrollees could start to drop out of the system. The results could include fewer plan members for health insurers, the potential collapse of the state-based exchange system, and an increase in both the number of uninsured and in uncompensated care costs for hospitals.

Even if 2017 does not bring significant changes, 2018 may be a different story. If changes to the ACA are legislated into effect in 2017, the health insurance marketplace for 2018 could be impacted.  Such impacts would likely be felt by health insurers in terms of:

  • Regulatory changes.
  • Financial modeling changes.

Hospitals and health systems would likely see changes in:

  • How they negotiate rates with insurers.
  • Their level of uncompensated care to the uninsured.
  • Profitability.

There is much uncertainty for health care organizations today regarding the ACA and other regulatory areas. Even before the election, 84% of health care organizations said their next critical risks were likely to emerge from regulatory issues, according to Marsh’s 2016 Excellence in Risk Management Survey.

As part of a highly regulated industry, you should be talking now with your risk and insurance advisors about strategies to make your organization risk ready in 2017 and beyond.

Related to:  HealthCare

Mark Karlson

US HealthCare Leader