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Q&A: The 2020 Election and the Future of Healthcare in America

October 23, 2020

With the US election just days away, here is what you need to know when it comes to healthcare.

As we near the end of one of the most bruising presidential campaigns in memory—amid a pandemic and a recession—the future of healthcare in America is on the minds of voters and business leaders alike. It will also be the focus of BRG’s Healthcare Leadership Conference (HLC) scheduled for December 8, 2020. With the election looming, John Kelliher, who will present at the HLC, discussed the healthcare outlook under a number of election scenarios.

Q: Much of this year’s HLC is focused on the political landscape after the election. Can you map out what the possible scenarios would mean for healthcare?

The most likely outcome is divided government, regardless of who wins the White House. The Democrats will probably keep control of the House, and the Republicans have a good chance of holding onto a majority in the Senate. This is also the best outcome for the healthcare industry, because it means very little will change: Republicans can’t cut spending dramatically, and Democrats can’t shift resources from Medicare to coverage expansion—as with the Affordable Care Act (ACA).

The second most likely outcome is full Democratic control, with Joe Biden winning the presidency and the Democrats winning the Senate while holding onto the House. In that scenario, the Democrats’ Senate majority will be slim, making it difficult to push through big legislation. The healthcare plans Biden has outlined are pretty incremental and mostly build on the ACA framework. But even those will be hard to pass with a slim majority. A small coverage expansion is possible, but that could lead to cuts elsewhere—e.g., drug price regulation to save money for more generous exchange subsidies.

Republican control of the White House and both houses of Congress is unlikely. But if it happens, it could lead to reduced healthcare spending, especially if there is a focus in Washington on deficit reduction. If that happens, the GOP will look to cut programs while the Democrats try to raise taxes.

Q: Medicaid is going to be a main focus at the event. Can you explain the current landscape for Medicaid, and specifically how it has been affected by COVID-19?

Thirty-seven states and Washington, DC, have fully implemented Medicaid expansion, and Missouri and Oklahoma are in the process of doing so. States such as Kansas, North Carolina and Wisconsin could be adopters in the next couple years, and only a handful of states are likely to resist expansion over the long term—Texas and Wyoming, for example.

The recession brought on by COVID-19 will increase Medicaid enrollment and will in turn stress state budgets. For now, federal COVID emergency money is cushioning the states, but by 2022 or 2023 states likely will face their own budget balancing strains, which could put pressure on Medicaid spending.

Q: Medicare’s trust fund has been hit hard by COVID-19—and is projected to be insolvent in a few years. Should that be getting more attention in this election season?

It is amazing that that no one is talking about the Medicare trust fund shortfall—or the larger deficit and debt that are at the highest levels in US history and growing. It will be a bucket of cold water for whoever is in the White House next year. They will almost immediately have to deal with Medicare trust fund insolvency projected for October 2023, and then the larger deficit problem, and then the Social Security trust fund shortfall by 2030. There are some huge and difficult policy choices looming. It is a big problem that no one is discussing these issues, much less proposing solutions for them.

Q: Another topic for the event is managed care. What do you see as the issues to watch on that front?

There will be more managed care everywhere, including from state Medicaid programs. Simultaneously, Medicare Advantage, which represents 41 percent of beneficiaries, now will reach 50 percent before the end of the decade. Accountable care organizations are also growing rapidly, and employers are under pressure to cut employee healthcare costs. Simply put, we are looking at less old-fashioned fee-for-service healthcare. That is a challenge for providers—and an opportunity to be efficient, provide high-quality care and win business from cost-conscious payers, both private and government run.

Q: As someone who follows the intersection of politics and healthcare closely—and as someone involved in putting on BRG’s Healthcare Leadership Conference—what are your thoughts on whether we’ll have a final outcome in the presidential election when the conference begins on December 8?

I was deeply involved in the Florida recount as a member of the Bush campaign—I arrived in Florida the morning after election night—and I actually doubt we will have a repeat. I would say there is about a 10 percent chance. The nightmare scenario is multiple states being contested. But if it is only one state, as it was 20 years ago, it would at least be contained. If three or four states are contested, it is likely to be become very divisive and would drag into at least December and perhaps the new year. But I think that is even less likely than the results being contested in a single state.

BRG Experts

Related Professionals

John J. Kelliher

Managing Director

Washington, DC
Federal Policy

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