Practice Management

U.S. health care policy: What lies ahead?

Uncertainty is the new normal – still, experts say hospitalists are primed to help shape American health care.


The New Year brings new leadership in the United States, with President-elect Donald Trump taking office later this month. With a Republican-controlled Congress, party leaders have the opportunity to shape the nation’s policies around conservative ideals. This includes health care.

Since the Affordable Care Act (ACA) was passed in 2010, Republicans have vowed to repeal and replace it. This could be their opportunity.

However, “there is no clear coalescence around specific policy reforms that would replace the Affordable Care Act,” says Christine Eibner, PhD, a senior economist at Rand and a professor at the Pardee Rand Graduate School.

As a candidate, Trump did little to advance policy ideas around health care. Meanwhile, House Speaker Paul Ryan (R-Wis.) and others have, over the years, proposed reforms with which Trump may or may not agree.

Christine Eibner

Dr. Christine Eibner

“The Republicans now have a hard issue in their hands,” says Allison Hoffman, JD, professor of law at UCLA School of Law and an expert on health care law and policy. “It was hard before the Affordable Care Act, and it will be hard after. There is not an easy solution.”

By 2016, the ACA had expanded health coverage to 20 million people through Medicaid and private insurance on health care marketplaces. It extended the solvency of the Medicare Hospital Insurance Trust Fund. It accelerated the pace of delivery system and payment reform through creation of the Center for Medicare & Medicaid Innovation.

The law, however, has not been without its challenges.

“It was a strong achievement to get 20 million people insured, but it’s not clear that it bent the cost curve,” says Dr. Eibner. “There are high premiums on the individual market and still 31 million people without coverage. There is still opportunity to improve.”

Where we stand January 2017

Whether the Republicans can or will repeal the ACA in its entirety and improve it remains unknown. But, the experts say, the landmark law has left its mark on the American health care system.

“Everyone is complaining about the uncertainty created by the election, but we have been dealing with a highly uncertain environment for many years,” says Ron Greeno, MD, FCCP, MHM, senior advisor for medical affairs at TeamHealth, chair of the SHM Public Policy Committee, and SHM president-elect. “There will be changes, but things were going to change no matter the outcome of the election. It continues to require tolerance for change and tolerance for uncertainty.”

In an analysis for the Commonwealth Fund, Dr. Eibner investigated the economic implications of aspects of Trump’s plans as a candidate. Using a computer model that incorporates economic theory and data to simulate the effects of health policy changes, Dr. Eibner found that Trump’s plans (full repeal alone or repeal with tax deductions for health care premiums, Medicaid block grants, or selling health insurance across state lines) would increase the number of uninsured people by 16 million to 25 million, disproportionately impact low-income and sicker patients, expose individual market enrollees to higher out-of-pocket costs, and increase the federal deficit by $0.5 billion to $41 billion.1 The Congressional Budget Office (CBO) estimates full repeal could increase the federal deficit by $137 billion to $353 billion by 2025.2 Rep. Ryan’s plan, A Better Way, proposes providing people more control over their health care, giving tax credits instead of subsidies for premiums, capping the employer-sponsored health insurance tax exclusion, and expanding use of health savings accounts.3 However, Rep. Ryan’s plan “doesn’t reduce the cost of health care. It puts more onus on individuals, and their costs go up,” Ms. Hoffman says. “The weight of that will be more on people who have preexisting conditions.”

Dr. Ron Greeno

Dr. Eibner says there is “a clear implication” that physicians may lose patients, care for a greater share who are uninsured, and see a return of higher rates of uncompensated hospital care. The experts say Republicans are unlikely to restore cuts to disproportionate-share hospitals that were made under the ACA because more patients were insured.

Joshua Lenchus, DO, RPh, FACP, SFHM, a member of SHM’s Public Policy Committee and hospitalist at the University of Miami/Jackson Memorial Hospital in Florida, is no fan of entitlement programs like Medicaid but says, “The safety-net hospital where I work would rather have people covered with something than nothing.”

Dr. Lenchus is optimistic that economic reforms under Trump will lead to more jobs, increasing the number of people covered by employer plans. “The economy drives health care reform,” he says. “He has to up his ante now and show people that he can stimulate job growth in this country so we don’t have this middle class that is continuously squeezed.”

Dr. Greeno and Ms. Hoffman, who is also a faculty associate at the UCLA Center for Health Policy Research and vice chair of the Insurance Law Section of the Association of American Law Schools, suggest hospitalists get involved as rules are being shaped and written.

“We want to help reform the delivery system, and we want it to be done right and to be done fairly. We want to have say in how our patients are treated,” Dr. Greeno says.

Key provisions: A delicate balance

Many people equate the ACA with the individual mandate, which requires nearly all Americans to purchase health insurance or pay a fine. The federal government provides subsidies to enrollees between 138% and 400% of the federal poverty level so their out-of-pocket costs never exceed a defined threshold even if premiums go up. These could be on the chopping block.

“The last bill Congress passed to repeal the Affordable Care Act, which Obama vetoed, repealed the individual mandate and subsidies for people to buy insurance,” Ms. Hoffman says. “If they do repeal it, private insurance through the exchanges will crumble.”

Mr. Trump’s tax deductions to offset premium costs are based on income, making them more generous for higher-income earners than low-income ones, Hoffman adds.

Allison Hoffman

Allison Hoffman

Additionally, “premiums go way up because many more people can’t afford insurance, so those who choose to buy are the sickest,” says Ms. Hoffman. “Risk pools get extremely expensive, and many more people see it as unaffordable.”

As a result, she says, people may choose high-deductible plans and face high out-of-pocket costs if they do seek care.

“It’s asking individuals to save by deciding how they’re going to ration care, where someone says they’re not going to go to the doctor today or fill a prescription drug they need,” Ms. Hoffman says.

Meanwhile, Mr. Trump has said he would like to keep the provision of the ACA that bans insurers from denying individuals with preexisting conditions. This, experts agree, may not be possible if other parts of the law are repealed and not replaced with similar protections for insurers.

“If you try to keep the rules about not including preexisting conditions and get rid of subsidies and the individual mandate, it just won’t work,” Ms. Hoffman says. “You end up with extraordinarily expensive health insurance.”

Rep. Ryan’s plan would prohibit insurers from denying patients with preexisting conditions but only if patients maintain continuous coverage, with a single open-enrollment period. He has promised to provide at least $25 billion in federal funding for state high-risk pools.

Prior to the passage of the ACA, 35 states offered high-risk pools to people excluded from the individual market. The Kaiser Family Foundation shows the net annual losses in these states averaged $5,510 per enrollee in 2011. Premiums ranged from 100% to 200% higher than non–high-risk group coverage. Government subsidies to cover losses amounted to $1 billion in each state.4

Meanwhile, both Mr. Trump and Rep. Ryan have proposed profound changes for Medicaid. Dr. Greeno calls this a “massive political challenge” unless they can provide an alternative way to cover people who currently rely on the federal-state entitlement, as well as those who gained coverage through ACA expansion. Currently, 70 million people are enrolled in Medicaid and the Children’s Health Insurance Program.5 Through Mr. Trump’s suggested block grants, states would receive a fixed amount of money to administer their program with increased flexibility. Rep. Ryan’s plan calls for enrollment caps that would distribute a dollar amount to each participant in the program with no limit on the number of enrollees. Either would be adjusted for inflation.

States could implement work requirements for beneficiaries or ask them to pay a small amount toward their premiums. Expansion states could also lower the Medicaid threshold below 138%.

Some states will struggle to provide for all their enrollees, Ms. Hoffman says, particularly since health spending generally outpaces inflation. Dr. Lenchus is more optimistic. “I believe states that didn’t expand Medicaid, one way or another, will figure out a way to deal with that population,” he says.

And … Medicare

The other entitlement program facing abrupt change is Medicare, typically considered the third rail of American politics.

“This is the hot political moment,” Ms. Hoffman says. “This is the point where the Republicans think they can tick off their wish list. For many Republicans, this kind of entitlement program is the opposite of what they believe in.”

Though Mr. Trump has said before he would not alter Medicare, he remained quiet on this point in the aftermath of the election. Repealing the ACA would affect Medicare by potentially reopening the Part D prescription drug doughnut hole and eliminating some of the savings provisions in the law. In fact, the CBO estimates Medicare’s direct spending would increase $802 billion between 2016 and 2025.1 Rep. Ryan has talked about privatizing Medicare by offering seniors who rely on it vouchers to apply toward private insurance.

“At the highest level, it’s moving Medicare from a defined benefit to a defined contribution program,” Ms. Hoffman says. “It shifts financial risk from the federal government onto beneficiaries. If Medicare spending continues to grow faster than the rest of the economy, Medicare beneficiaries will pay more and more.”

Seniors may also find themselves rationing or skimping on care.

Despite Rep. Ryan’s statements to the contrary, Medicare is not broken because of the ACA, Ms. Hoffman says. Its solvency has been prolonged, and though the reasons are not clear, Medicare spending has slowed since the passage of the ACA.6

MACRA launch

Another key factor in the health care policy landscape is MACRA, the Medicare Access and CHIP Reauthorization Act, which fundamentally shifts the way the government administrates and reimburses physicians for health care. MACRA begins in 2017. Dr. Greeno is concerned that changes to the ACA will impact the testing of payment models CMS is testing.

“There are hundreds of hospitals and thousands of physicians already invested in different models, so I don’t expect anybody has any desire to pull the rug from under physicians who are testing alternative payment models [APMs],” he says. “MACRA was passed on a strong bipartisan vote, and it created an APM track. Obviously, Congress intended APM models to continue to expand.”

Dr. Greeno says hospitalists are helping “shape these models,” working with the CMS and the Physician-Focused Payment Model Technical Advisory Committee (PTAC) “to ensure physicians participate in APMs and feel engaged rather than being a worker in a model someone else controls.”

On the campaign trail, Mr. Trump spoke of importing pharmaceuticals from overseas in an effort to control high prices. This policy is no longer part of his online plan. He also proposes allowing the sale of health insurance across state lines.

“It would be giving enrollees in states with stricter regulations the opportunity to circumvent to a looser state, which undermines the state with the stricter regulations,” Dr. Eibner says. “That would really create winners and losers. People who are healthy can buy a policy in a state with looser regulations, and their costs would likely fall. But someone sicker and older, it would be harder.”

Ms. Hoffman defines such a plan as a “race to the bottom.” Without well-established networks of physicians and hospitals, startup costs in new states are prohibitive, and many insurers may not wish to compete across state lines, she adds.

Repeal of the ACA could also limit some of the health benefits it required of plans on the individual market. For example, policymakers might be allowed to strip the contraceptive coverage regulation, which provides for free birth control.

“The reality is a lot of things changing in health care now were changing before the Affordable Care Act passed – PQRS, value-based purchasing, hospital-acquired infections,” Dr. Greeno says. “MACRA will continue the journey away from fee-for-service toward outcome-based models.”

At such a pivotal time, he strongly encourages hospitalists to join SHM if they are not already members and to get involved in SHM’s Grassroots Network.

“For a society of our age – young – and size, we’ve been tremendously impactful in helping with delivery system reform,” Dr. Greeno says. “I think it’s because we’re supporting change, not trying to stop it. We just want it to be intelligent change.”

He also is “convinced” hospitalists will be “critical to the redesign of the health care system. Since we are going to be taking care of the majority of hospitalized adult patients in hospitals, hospitalists want to have our say.”

Kelly April Tyrrell is a freelance writer in Madison, Wis.


1. Eibner C. Donald Trump’s health care reform proposals: Anticipated effects on insurance coverage, out-of-pocket costs, and the federal deficit. The Commonweath Fund website. Available at: Accessed Nov. 17, 2016.

2. Budgetary and economic effects of repealing the Affordable Care Act. Congressional Budget Office website. Available at: Accessed Nov. 15, 2016.

3. Our vision for a confident America. A Better Way website. Available at: Accessed Nov. 17, 2016.

4. Pollitz K. High-risk pools for uninsurable individuals. Kaiser Family Foundation website. Available at: Accessed Nov. 17, 2016.

5. How accessible is individual health insurance for consumers in less-than-ideal health? Kaiser Family Foundation website. Available at: Accessed Nov. 17, 2016.

6. The Affordable Care Act and Medicare. The Commonwealth Fund website. Available at: Accessed Nov. 17, 2016.

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