May 30, 2024 - Health

Washington prepares for Trump term that could bring cuts to health programs

Illustration of an elephant balancing on red cross plus signs.

Illustration: Annelise Capossela/Axios

Health care lobbyists and conservative groups are stepping up preparations for what a second Trump presidency could mean for drug prices, health insurance subsidies and changes to health care entitlements.

Why it matters: A Trump win would once again shock the system, bringing unpredictability and the possibility of cuts to federal health programs.

Inside the room: Several GOP lobbyists told Axios they've received intensifying requests from health care clients in recent weeks to game out the beginning of a new Trump term and build relationships with Trump world.

  • Much of the early focus is on how Republicans, should they also win the House and Senate, could quickly use the fast-track budget procedure known as reconciliation to push through an extension of the 2017 Trump tax cuts with simple majorities in both chambers.
  • Like past reconciliation bills, that could serve as a vehicle for partisan health care policies.
  • GOP sources say there is more planning in Republican circles than there was in 2016, when the transition was more chaotic and the lack of an agreed-upon replacement plan helped doom the Affordable Care Act repeal effort in Trump's first year.

Insiders say they're generally skeptical that Republicans would pursue a major ACA overhaul or full repeal of new Medicare drug pricing negotiations, but conservative-preferred changes to those programs are possible.

  • For instance, enhanced insurance subsidies, which helped drive a record surge in ACA enrollment but are set to expire in 2025, could become a casualty of a fully GOP-run Washington.
  • "The new reality is that you've got to push and you've got to really do reconciliation quickly," said one GOP lobbyist of the dynamic in Congress.
  • One wild card is it's never certain what Trump will focus on, and in the past few months he's swung from vowing to renew ACA "repeal and replace" efforts to declaring his desire to improve the 2010 law.

The big picture: Next year promises to be an exceedingly busy one for health care policy, regardless of the election outcome.

  • The expiration of the boosted ACA subsidies and Trump tax cuts, along with another showdown over the debt ceiling, could create ripe conditions for dealmaking.
  • To help pay for any of this, insiders pointed to a couple of policies that have drawn bipartisan support: cracking down on Medicare Advantage overpayments to insurers and cutting back on Medicare payments to hospitals for outpatient care.
  • Medicaid cuts and policies like work requirements favored by the GOP could also be in the mix for a reconciliation package passed without Democratic votes.

Between the lines: Paragon Health Institute, America First Policy Institute and the Heritage Foundation are among the Trump-aligned groups working on policy options.

  • Paragon president Brian Blase, a former Trump health official, said some in the health care industry have started to reach out to him to discuss what could happen next year.
  • "You don't want to get ahead of your skis and give industry a chance to start figuring out what they're going to do and what actions are going to reduce government subsidies to industry," he said.

Some of the conversation has also centered on what Trump might do through executive action, especially on drug prices.

  • Trump could try to revive his push to tie Medicare drug prices to lower ones paid abroad, though a last-minute effort in 2020 was blocked in the courts after drugmakers challenged it.
  • Drugmaker lobbyists said they're already trying to figure out how to more effectively communicate drawbacks to the so-called "most-favored nation" policy and counter other more populist Trump health care ideas.

The bottom line: Republican lobbyists and strategists were adamant the GOP likely won't try again at ACA repeal and replace, though Trump himself could always change that.

  • Instead they expect a focus on targeting health industry practices, with the looming possibility of a Medicaid overhaul.

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