How Will a Second Trump Administration Impact Healthcare?

Although many experts predicted a too-close-to-call election in which a winner might not be declared for days or even weeks, in the end the 2024 election was surprisingly light on drama. President-elect Donald Trump scored a decisive victory over Vice President Kamala Harris and secured a second term in the White House.

Now that the outcome of the election has been decided, healthcare leaders can begin planning in earnest for potential legislative changes that the industry could see over the next four years. But what might those changes look like?

The policies and mandates governing those areas are set by Cabinet appointees and enforced by departments like HHS, CMS, and ONC, and Trump has suggested that Robert F. Kennedy, Jr. will serve in some capacity as a healthcare advisor in his administration. Kennedy, for his part, has proposed eliminating or dramatically reworking “entire departments” impacting healthcare policy and administration.

That said, it remains unclear what, if any, authority Kennedy will actually have. On CNN the day after the election, Trump transition co-chair Howard Lutnick said that Kennedy will not be tapped to oversee HHS. However, even without a formal position, Kennedy could still play a key role in influencing healthcare policy—and given his previous statements, this could have potentially significant implications for the healthcare industry.

Predicting the Trump administration’s impact on the healthcare industry is admittedly challenging; like most presidential candidates, Trump’s campaign rhetoric focused more on improving healthcare from the patient’s perspective and less on healthcare administration and operations. Trump has also changed position on a number of healthcare-related issues both during his first term and throughout this year’s campaign, which makes it difficult to predict the direction he might take once he returns to the Oval Office.

At Edifecs Connect Healthcare® 2024, our annual event for industry executive leaders, Edifecs CEO Venkat Kavarthapu talked with John Kelly about what a second Trump presidency might mean for healthcare. We shared Kelly’s thoughts on how the election could specifically impact healthcare data exchange in a previous blog post; now, with more clarity over who will be occupying the White House for the next four years, we can turn our focus to other areas.

Price Transparency

One consistent theme of Trump’s first term and his 2024 campaign has been price transparency for patients; in fact, his first term saw the finalization of CMS-9915-F. Better known as the “transparency in coverage” final rule, 9915-F required plans and insurers to disclose cost-sharing estimates at the member’s request and publicly release negotiated rates for in-network providers, historical out-of-network costs and billed charges, and drug pricing information. This information would allow individuals to compare providers’ prices and, in doing so, encourage providers to reduce care costs. While CMS-9915-F was broadly popular with providers, insurers were critical of the rule, arguing that it would raise—not lower—health insurance premiums for members.

In theory, Kelly agrees that price transparency in healthcare is important, but he is not confident it’s achievable. “The rhetoric of price transparency makes sense,” Kelly told Kavarthapu. “If people know what things cost, then you can actually achieve a level of competition that should drive prices down. [But] we’ve been trying to achieve price transparency for probably 20 years at this point. Under the current model […] you have no idea what services are going to be consumed and billed for when you walk into the [provider’s] office. So it’s really hard to say what this is going to cost ahead of time so that you can actually shop and compete.”

Price transparency laws and legislation like the No Surprises Act have greatly expanded the number of medical services for which patients can review and compare prices; CMS offers a price comparison tool for over 300 planned services. The challenge, of course, lies in predicting the cost of unplanned care. “It’s impossible to really have true price transparency [for everything],” Kelly said. Though he acknowledged that there will be pressure on the Trump administration to continue to push for price transparency, Kelly cautioned that any efforts to that end will likely be met by significant pushback from entrenched interests in the healthcare industry.

Drug Prices & PBMs

Legislative reform of pharmacy benefit manager (PBM) practices also figures to be part of the second Trump administration’s healthcare agenda, though Kelly believes PBMs can be a bulwark against high prescription drug costs. “Insiders appreciate some of the values that PBMs bring to the market in terms of negotiation and the ongoing continuity and stability of delivering prescription drugs to people who need them,” said Kelly. “There’s a lot to be said about [how PBMs help us] identify price gouging and negotiate around that.”

Reducing the cost of prescription drugs will likely be a priority for the Trump administration. As Kelly noted, “From an actuarial basis, total cost of healthcare, all the jobs that are created in this country, you can see [why drug prices are so high] at a macro level, but it’s just impossible for an everyday consumer who’s having trouble paying their bills to understand how that works.”

“[With] the pressure, politically, on PBMs and drug companies, on the healthcare system in general […] I don’t think anybody can back off a promise to lower drug costs,” Kelly said. However, this will require careful maneuvering on the GOP’s part. “Conservative politics stands on the side of business,” said Kelly. “I think it’s going to be a very complicated conversation for anybody in Medicare or the federal government to ‘take on’ the drug companies.”

“If that’s the context or the environment in which we’re operating, I suspect that the drug companies will win for quite a while until the consumer pressure just blows up.”

The ACA & Value-Based Care

The Affordable Care Act (ACA) was a key driver of the healthcare industry’s shift away from fee-for-service and towards value-based care. In his first term, Trump attempted to repeal the ACA, which has led to some concern that he would attempt to do so again in his second term. During this year’s campaign, Trump’s rhetoric focused more on “improving” the ACA, which could indicate that Trump was uninterested in reviving what would likely be a losing battle to repeal the ACA. However, that may change if Republicans retain their majority in the House of Representatives.

With Trump’s election triumph and the GOP regaining their Senate majority, a victory in the House would give Republicans control of the White House and both chambers of Congress. Should that occur, many experts believe eliminating (or at least drastically reshaping) the ACA and significant cuts to Medicaid spending would be a major priority. Some of the possibilities include allowing the ACA’s enhanced subsidies to lapse, a reinstatement of policies that limit ACA outreach efforts and reduce enrollment rates, and rollbacks to Medicaid expansion.

Should any or all of these come to pass, we could see a negative impact on at least some portion of the 88 million people covered by Medicaid or ACA Marketplace plans. But In Kelly’s view, even if the ACA—and, by extension, value-based care—did come under fire during Trump’s second term, the healthcare industry would remain undeterred from its mission to create value. “The pursuit of value—increasing quality, decreasing costs, creating efficiencies in both process and productivity: those are basic principles [the industry has] been trying to achieve for the past 20 years,” said Kelly.

How Healthcare Leaders Can Prepare

When it comes to predicting what the next four years might hold for the healthcare industry, the only real certainty is uncertainty. Legislative agendas can shift. Another industry-altering event like the COVID-19 pandemic could occur. With that in mind, Kelly believes the best thing healthcare leaders can do is remain focused on what they can control.

“If [healthcare organizations] keep their eye on the ball of trying to increase quality, increase efficiency, and leverage the power of information mobility, those principles have transformed every other industry over the last 30 years. I think healthcare will continue to pursue those goals regardless of what happens [legislatively.]”