After months of intense campaigning, the US Presidential election is finally set to take place next Tuesday, November 5. While issues such as the economy, immigration, and international conflict have taken center stage, other major topics, such as healthcare, have emerged as important issues.
Healthcare remains a significant consideration in the minds of the electorate. Nearly 65% of all voters rank healthcare as their top concern, second only to inflation at 81%. With key policies like the expiration of the Affordable Care Act (ACA) and Medicare Advantage on the line, the stakes for healthcare providers and patients alike remain high.
Passed in 2010, the Affordable Care Act aims to provide affordable health insurance and reduce uninsured rates for millions of Americans nationwide. The Biden-Harris administration expanded premium tax credits for ACA plans in 2021 and 2022 – extending coverage to nearly four million people who did not previously qualify under the ACA – but these subsidies are set to expire at the end of 2025.
Support for Medicare Advantage (MA) – a private insurance alternative to traditional Medicare that provides coverage to nearly 33 million Americans – is also largely split among party lines.
As the election draws closer, the direction of both policies hinges on the outcome – making it crucial to examine how each candidates’ views could reshape the healthcare landscape.
What Can We Expect from the Election?
While current polling for the presidency remains neck-and-neck in key swing states, outcomes for the legislative branch are shaping up to be more predictable.
With Democratic Senator Joe Manchin retiring in West Virginia – now a solid red state – and polls showing incumbent Democrat Joe Tester losing his race in Montana, it seems increasingly likely that the Republicans will gain enough seats to erase the Democrats current two seat lead. The House of Representatives, in contrast, remains more of a toss-up, but is likely to shift back to the Democrats driven by re-districting.
What would a gridlocked Congress mean for healthcare? While the S&P 500 Healthcare typically outperforms the S&P 500 when the presidency and the other party is controlling at least one congressional chamber, a split legislative branch would also have larger policy implications.
For a Trump administration, this would mean working with Democrats to extend the Tax Cuts and Jobs Act (TCJA) – his main legislative goal for 2025. For Harris, expanding access to healthcare and protecting funding for the ACA – her main legislative goals – would also require reaching across the aisle to work with the GOP.
No matter who wins the election, the simultaneous expiration of the TCJA and ACA subsidies would force both parties to collaborate, setting the stage for some intriguing political scenarios and compromises.
The Future of ACA Subsidies
Could the ACA be repealed in the event of a Trump victory? The question was on the minds of many voters and analysts during his first election bid in 2016. But today, the promise of “repealing and replacing” the ACA no longer seems realistic.
Ultimately, overturning a major piece of legislation requires more than just a Republican president; it demands party-wide consensus in Washington. And while the ACA remains highly unpopular among the Republican party, removing coverage from 91 million Americans currently insured through the program – many in red states – could lead to a backlash at the polls.
Though the ACA isn’t likely to disappear anytime soon, the fate of its enhanced subsidies is a different matter. Estimated to add $335bn to the federal deficit by 2034, the hefty price tag will likely alienate moderate Democrats apprehensive to pass a bill that would require future tax hikes.
With limited Republican support, extending the enhanced subsidies would require Democrats to win the Presidency, House, and 60+ votes in the Senate to circumvent the filibuster, an extremely unlikely scenario. While possibilities exist for Democrats to structure a combo deal with a TCJA extension, it would require massive compromises, suggesting that the future existence of the enhanced subsidies is slim.
What does the Future Hold for Medicare Advantage?
For years, Medicare Advantage has served as a contentious issue in Congress, with Democrats and Republicans debating its role in expanding coverage, controlling costs, and providing additional benefits through private insurers. Under President Biden, MA was subject to increasing regulations, and plans associated with the program received lower government payments.
This led to a decline in the MA Star Rating System – a tool used by the Centers for Medicare & Medicaid Services to evaluate and rate the quality of MA plans. Overall, Stars fell by 3% during the Biden presidency. In contrast, Trump focused on expanding membership and championed MA as a private alternative to government care for seniors during his time as president.
As the 2024 election approaches, each candidate’s policy direction is likely to mirror their previous stances. A Harris administration would likely continue to tighten oversight and regulation of Medicare Advantage, potentially leading to more scrutiny and lower government reimbursements for plans.
In contrast, a Trump presidency would likely reinvigorate the program, easing regulations and boosting enrollment. Additionally, Trump has the power to appoint CMS leaders who could reverse many of Biden’s policies, creating favorable conditions for MA-focused companies like Humana (HUM) and UnitedHealthcare (UNH).
As the 2024 election enters the final stretch, the trajectory of US healthcare remains a critical issue. The next administration will face key decisions on the future of ACA subsidies, Medicare Advantage, and the broader healthcare landscape. Whether it’s a continuation of stricter oversight or a shift toward deregulation, the policies enacted in the coming years will directly impact millions of Americans and reshape the industry.