Healthcare News & Insights

ACA post-election: Healthcare outlook for hospitals

The news that Donald Trump won the presidential election has created uncertainty in the current healthcare landscape, particularly regarding the future of the Affordable Care Act (ACA). And one big question remains: How will the new administration affect hospitals over the next four years? 

Immediately after election results were announced, hospital stocks dropped, according to an article from Investor’s Business Daily. This was in part due to fears about loss of healthcare funding, since Trump has promised to repeal the ACA after he takes office in January.

Millions of Americans stand to lose health insurance, which may severely impact hospitals’ bottom lines.

Other changes Trump has proposed, such as leaving Medicaid funding in the hands of states (as discussed in an article from HealthcareITNews), may also hurt hospitals’ profits. Many hospitals were thriving due to the prior expansion of Medicaid coverage under the ACA. The loss of federal funding will likely limit states’ resources to provide coverage.

A repeal of the ACA may leave hospitals scrambling to make up for losses – but according to healthcare policy experts, it won’t happen right away.

Process for repeal

A blog post from Health Affairs lays out the process that Trump and a Republican-controlled Senate would have to follow to abolish the ACA.

Theoretically, the law could be repealed immediately. But even if Trump did so on day one, it’s not likely to go through without any issues.

Here’s why: The Senate still has enough Democratic votes to cause a filibuster of the repeal, so Trump will have to counter this resistance. Plus, per the Health Affairs post, repealing the entire ACA itself is difficult because it doesn’t just contain provisions about insurance coverage. Besides governing the administration of Medicare, it also has many areas covering almost every aspect of health care.

Without the law, Medicare couldn’t be administered at all until there were new rules written that outline its replacement and cover many other provisions of the ACA. And that can’t happen overnight.

Alternative method

What Trump and the Senate could do right away is create budget reconciliation legislation to repeal the specific provisions of the ACA that govern expanded Medicaid coverage, premium tax credits to cover the cost of insurance and other financial aspects of the law, because they directly affect federal expenditures.

A similar piece of legislation was proposed by Congress in 2015. President Obama vetoed it, but a bill of this nature would likely pass under a Trump presidency.

Trump and other Republicans have proposed a combination of using tax deductions and subsidies for those who have health savings accounts (HSAs) and fixed dollar tax credits as alternatives to help Americans pay for insurance in lieu of the ACA.

However, the specifics for these plans haven’t been discussed and finalized, and they may take years to develop and implement. So even if budget reconciliation legislation repeals specific ACA provisions, the full brunt of the changes may not be felt right away.

In addition, while budget reconciliation legislation could cause many Americans to lose coverage, its effects may be softened a bit because other portions of the ACA, including bans on pre-existing coverage and caps on lifetime dollar limits, don’t directly affect federal revenue. So it’s not likely they can be included in the law.

However, similar to what happened with the most recent ICD-10 delay, there’s a chance these changes could be added to a bill that’s considered “must pass” legislation down the line.

Immediate impact

With all the work that must realistically happen to repeal the ACA, the biggest changes may not impact hospitals immediately – but there will still likely be some effect on revenue, particularly if Trump and other Republicans choose not to actively enforce existing regulations during the repeal process.

In addition, several pending lawsuits designed to invalidate portions of the ACA may be decided by Republican-controlled courts in the next few years.

Other healthcare changes

There will also be other changes coming in the wake of the election that’ll affect facilities. According to HealthcareITNews, Trump plans to continue the current push toward price transparency in healthcare so patients can compare the costs of services at different hospitals.

And one area where hospitals might experience some relief: Trump wants to ease regulations so more drug companies can bring in medications from overseas, which should increase competition and lower the rising cost of prescriptions for both consumers and facilities.

Because these plans aren’t set in stone just yet, we’ll keep you posted on any updates.

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