Following Midterms, New Health Care Roadmap Takes Shape

By Judy Packer-Tursman

With the November midterm elections in hindsight, and Democrats controlling the House and gaining key governors' seats come January, a new road map for health care in the U.S. is taking shape — and much of it affords potential business opportunities to health plans.

On Capitol Hill, Republican efforts to repeal and replace the Affordable Care Act (ACA) are thwarted for at least the next two years, potentially giving insurers a more stable, attractive marketplace in which to sell their products. Voters in the red states of Idaho, Nebraska and Utah approved ballot initiatives to expand Medicaid under the ACA.

In Kansas and Maine, "voters elected governors who pledged to implement initiatives to expand Medicaid that had been stymied in previous administrations," Meg Murray, CEO of the Association for Community Affiliated Plans said, in a statement.

On the flip side, a divided Congress, in which Republicans hold an expanded majority in the Senate, is expected to create partisan gridlock on many fronts. GOP gubernatorial wins in Texas and, apparently, Florida, make Medicaid expansion highly unlikely in two densely populated red states.

"All-in-all we think this is the best case scenario for healthcare stocks and we expect continued outperformance in 2019 and beyond," Leerink analyst Ana Gupte, Ph.D., said in a Nov. 7 note to investors. "We expect to see legislative deadlock for the next two years, with an uptick in House hearings and political posturing while President Trump continues to push his agenda through executive action and the judiciary. We are bullish on MCOs, facilities and payor services across the board."

Better health care coverage might arise from tweaking the ACA or introducing Medicare-for-All or some approach in between, "and depends on which ideas of presidential candidates for 2020 catch fire," says Rosemarie Day, founder and president of Day Health Strategies LLC. "…I think the good news is we can turn our attention more toward that [instead of] worrying about the ACA being replaced — playing offense, not defense."

With efforts to repeal and replace the ACA being pushed aside and some uncertainty about the individual insurance market being allayed, more insurers might participate in the exchanges, Day says.

From Health Plan Weekly