The ancient Chinese curse – “May you live in interesting times” – certainly springs to mind these days. What does the election of Donald Trump mean for the healthcare industry, the Affordable Care Act (ACA) and current healthcare market trends? Let’s take a quick look at the likely effects of the election, but first let’s set the stage:
Background Data:
- Per a July 2016 federal Department of Health and Human Services study, it is estimated that 18% of 2016 personal income in aggregate will be spent on healthcare, with 5% of the population accounting for nearly half of the estimated $3.3 trillion 2016 healthcare spending and 50% of the population spending less than $3,000 each.
- The healthcare cost reduction effect of the Great Recession has dissipated, with an anticipated healthcare cost increase of over 5% per year projected through 2025. The economic drag on the U.S. economy of healthcare spending has returned to almost pre-recession levels, and accountable care organization (ACO) savings to date have been relatively nominal.
- Once aged in, Medicare will have over 70 million Baby Boomer generation seniors to care for…and with rising life expectancy comes greater lifetime healthcare costs.
- The United States will have a shortfall of doctors before 2025, with a significant primary care shortfall expected, a significant shortage of doctors available who accept Medicaid and the U.S. ranked as the 24th of 28 countries by the number of doctors per thousand people among the Organization for Economic Development countries.
- 20 million people were afforded insurance under ACA programs, including over 9 – 11 million (varies depending on source studies) in 2016 through the insurance exchanges and the remainder through Medicaid expansion in 32 states (as of September 2016).
- Approximately 73 million Americans were covered by Medicaid or CHIP. Federal subsidies for Medicaid expansion are to trend downwards to 90% by 2020. A growing number of states are moving toward managed Medicaid programs in an effort to contain costs that, in some instances, previously threatened to bankrupt state budgets in the absence of further tax increases.