Five minutes on healthcare in marathon speech
President Donald Trump’s State of the Union (SOTU) address was long but actually gave short shrift to the issue of healthcare affordability. In truth, the administration has been very active on healthcare, which made the fact that healthcare was mentioned for just five minutes in the lengthiest SOTU ever (so we think) odd.
We know that healthcare affordability certainly resonates with voters and continues to be among the top issues on voters’ minds. Cost of living, inflation, and the economy appear to be the top issue in polls, with healthcare costs and access right behind it. In truth, healthcare affordability is now a cost-of-living issue as about 10% of monthly family budgets are consumed by healthcare costs. Healthcare is a key worry for the public. Republicans are hurting on the issue. Voters tend to give the Democrats better numbers when asked who would better tackle healthcare issues. But polls also show that neither party is handling healthcare costs and access particularly well.
There are some things that the Trump administration has done thus far that I don’t love while others seem to signal positive monumental shifts. It has pursued drug price reform in a big way. It is seeking to remake the Affordable Care Act (ACA) and the Exchanges in a more subtle way than under Trump 45 but with major potential impacts. It seems very focused on technology in healthcare and is dedicated to value-based care (VBC) models and designs – so much so that we have a large number of acronyms and alphabet soup in healthcare just in one year!
President Trump covered two healthcare issues in the SOTU and let’s discuss them briefly.
The Great American Healthcare Plan
Trump doubled down on his desire to shift subsidy and support dollars from insurers to individuals to pick their own healthcare. In the speech and his original announcement, few details have been given about exact mechanisms for the proposal. It is more of an outline than a real plan. He shied away from mentioning the expired enhanced Exchange subsidies.
I did a blog at the time of the announcement here: https://www.healthcarelabyrinth.com/trumps-great-healthcare-plan-falls-short/ . You can get my complete views there.
As I noted, his themes at least tie to policy priorities in either the House or Senate GOP caucuses, which could pass in 2026 if they go down the road of another budget reconciliation bill.
While details are scarce, existing subsidies in the Exchanges appear as if they will go directly to Americans in need as opposed to health plans. I also did not like his characterization of health plans getting rich off of existing subsidies or his attacks on the Affordable Care Act (ACA). The subsidies may go to plans but are only triggered on behalf of an enrollee. And a lot is unclear.
- It is unknown if the subsidies are just for Exchange enrollees or a broader group of Americans.
- The assumption is they will go into Health Savings Accounts (HSAs).
- It is unknown if the subsidies will match existing base and/or recently sunset enhanced subsidies.
The argument here is that going direct to consumers will control costs, but it is possible health plans will hedge and increase prices more given the fact that they will not know membership and severity year to year. It is also unclear how the move ties exactly into healthcare premium reimbursement ICHRAs, direct primary care, and more. This would come in any legislation.
The House (via the Republican Study Committee, the largest caucus of conservatives in the House) is working on a bill that could include some of what the president wants. Various Senate GOP lawmakers want to do similar things.
Now, the move could destabilize the Exchanges and perhaps employer coverage. And I fail to see how Trump’s plan will lower costs as he says it will. It could increase them to some degree. But we know that insurance is unaffordable and the GOP does seem to want to move to a more consumer focus with skinnier plans. I am beginning to come to the conclusion that our rich benefit structure means a continuing high level of the uninsured as well as underinsured. Maybe reasonable but skinnier plans might be better than not having insurance or being able to use it.
Lower prescription drug prices
Trump championed the work he has done on prescription drug prices. Here he has amassed a more comprehensive record, with a series of executive orders, most-favored-nation (MFN) model proposals for Medicaid and Medicare, and price negotiations with drug makers to lower prices. He has said he wants all of this codified by Congress. His rhetoric was over the top and hyperbolic. We are on a long journey to lower prices on every drug in every line of business. We are not there yet as he insinuated. But you have to hand it to the president to have gotten this far. The progress is demonstrable and this could very well be a legacy item for him.
#healthcare #sotu #coverage #drugpricing
— Marc S. Ryan
