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  • A tangled web: healthcare and the 116th Congress

    Sometime Thursday afternoon, January 3, 2019, Democrat Nancy Pelosi will be elected Speaker of the House for the 116th Congress. Her election begins a two-year period of divided government, with the Republicans in control of the Senate and the White House while Democrats take charge in the House.

    The policy and political challenges facing both parties and President Trump are many. They include funding the government, border security and immigration, trade policy and a slowing/stalling U.S. economy and stock market.

    But one issue – healthcare – continues to dominate.

    Democrats

    Democrats believe the formula for success in 2019-2020 will continue to be:

    Healthcare + President Trump = Victory

    Virtually every Democrat in 2018 ran on a promise to protect Americans from being denied health insurance coverage because of “pre-existing conditions.” Democrats, who spent six years running away from Obamacare, suddenly embraced the most popular parts of the bill and promised to defend it. Their cause has been aided by a lawsuit initiated by Republican state attorneys general that would strike down the entire law. Recently, a federal judge in Texas agreed and held that the entire law must be thrown out (although he also stayed his decision pending appeal).

    Politically, that’s all very good for Democrats. On top of that, Democrats are seen as leading the charge against high prescription drug prices. Potential Democratic presidential candidates are racing to introduce legislation to lower drug prices through regulation, accelerating generic competition, allowing the federal government to negotiate prices, etc.

    So, healthcare is a winner for Democrats, right? Mostly, but the party is deeply divided over how far to go. Should the Democratic party embrace “Medicare for All”, some sort of single-payer, government-run health insurance program? The party’s liberal base of activists and donors are demanding its candidates swear to support it in some fashion or other. But surveys show most Americans remain widely sceptical of such a system. And Republicans can’t wait to run against “socialized medicine” and “government-run healthcare.”

    Republicans

    The Republican party is a more conservative party in 2019 than it was in 2017. Many moderate Republicans were replaced by Democrats in the 2018 election. But the country is still demanding action on issues that make conservatives uncomfortable. Republicans, for example, do not want to require insurance companies to price insurance policies without regard to the health of those they are insuring. That’s bad business. They also do not want to see government regulations diminish incentives for innovation in pharmaceuticals. But politics may force their hand.

    On top of that, many Trump Republicans want protections on pre-existing conditions and very much want relief from rising drug prices. And the U.S. Supreme Court may get another chance to rule on the constitutionality of Obamacare before the presidential election, so Republicans are firmly in the “be careful what you wish for” camp.

    President Trump

    Last year, President Trump and (former Eli Lilly CEO) Health and Human Services Secretary Alex Azar unveiled their “Blueprint to Lower Drug Prices.” Clearly, the President believes he must be perceived as on the side of those who believe drug prices are too high. The President has moved forward on some of this, including a proposal that drug companies be required to disclose the list price of a prescription drug in television ads. But will that be enough?

    Trump’s larger problem is Obamacare. He has continued to object to the Affordable Care Act and his Justice Department has joined the suit to strike it. His Administration has, some say, acted to sabotage the Act through regulation and other means. At the same time, President Trump promises to protect Americans with pre-existing conditions while saying that “Democrats will not.” Can he have it both ways?

    Bottom Line

    Early in his term, President Trump famously observed, “nobody knew healthcare could be so complicated.” It is no less complicated today than it was in 2017. So, pay attention to healthcare. To paraphrase a famous U.S. aphorism, in political terms, as healthcare goes, so goes the nation.

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