Navigating the New Political Landscape for Healthcare Policy

Key Takeaways:

• Premier’s Advocacy team provided an update on the 2024 U.S. election results and anticipated impact on the healthcare landscape.
• The evolving political environment can affect key areas such as Medicare, value-based care, the healthcare supply chain and healthcare access.
• Watch the on-demand webinar for a deeper dive into Premier's post-election update, including the legislative outlook and the new administration’s regulatory agenda. Since airing the webinar, officials have called additional House races and President-Elect Donald Trump has announced cabinet appointments, but its insights remain relevant.

The 2024 U.S. elections have ushered in a significant shift in political power, from divided government to single-party Republican control – a scenario not seen since the early days of President Trump's first term.

As political winds change, so too does the healthcare policy landscape, presenting both challenges and opportunities for industry stakeholders.

With Republicans holding the reins starting in 2025 in both the Executive branch and Congress, there is an expectation of a bolder, potentially more partisan agenda. The implications for healthcare could be vast, especially in areas traditionally prioritized by Democrats.

Potential Policy Directions in a Second Trump Administration

While healthcare was not a dominant theme on the campaign trail, its underlying importance cannot be overstated. As discussions turn to what a second Trump administration might prioritize, several potential policy directions emerge:

• Consolidation and private equity oversight: On the 2024 campaign trail, Trump adopted a more populist tone compared to his first term, suggesting that a second Trump administration might take a less business-friendly stance toward private equity and large corporations. While campaign rhetoric doesn’t always translate directly into policy, it’s possible the new administration may not align as predictably with pro-business interests as expected.
• Hospital and nursing home scrutiny: The potential for increased oversight of hospitals, nursing homes and healthcare providers with regard[s] to finances and quality remains strong. This is one area where continuity from the Biden administration might persist, even as other areas face deregulation or restructuring.
• Regulatory restructuring: Trump’s team has put priority on reshaping the regulatory and administrative structures. Trump has advocated for significant changes within regulatory agencies, such as the National Institutes of Health (NIH) and Centers for Medicare & Medicaid Services (CMS). This could involve reducing the size of the government workforce and reshaping how these agencies operate. Trump’s nomination of Robert F. Kennedy Jr. to lead the Department of Health and Human Services (HHS) and Dr. Mehmet Oz to lead CMS, coupled with the creation of a new entity headed by Elon Musk and Vivek Ramaswamy to promote government efficiency, underscores the potential for dramatic shifts in how regulatory bodies interact with healthcare providers.
• Value-based care: Both Republicans and Democrats have shown support for the shift from fee-for-service to value-based care. This bipartisan approach is expected to continue, although the emphasis and implementation strategies may differ between the parties.
• Changes to Medicare and the Affordable Care Act (ACA): Trump has indicated a preference for maintaining Medicare benefits, although budget reconciliation could open the door to enacting entitlement reforms. This creates potential risk for Medicare provider payments. During President Trump's first term, the ACA faced an existential threat as "repeal and replace" dominated the agenda. While recent rhetoric surrounding the ACA has softened, the potential for targeted changes remains. A critical issue on the horizon is the future of ACA subsidies, whose impending expiration could impact millions of Americans.
• Medicare Advantage growth: Republicans have traditionally shown strong support for Medicare Advantage, and a second Trump administration will likely continue to embrace continued growth going forward. However, a growing bipartisan concern is emerging around whether Medicare Advantage plans are being overpaid, suggesting potential scrutiny of program payment structures.
• Supply chain: On the campaign trail, Trump highlighted American independence and supply chain resilience as key priorities, but the specifics are unclear. It remains to be seen whether a second Trump administration would significantly increase tariffs, especially amid pushback from sectors like manufacturing and agriculture, and whether such actions would be paired with meaningful investments or support for domestic manufacturing.
• Drug pricing: Trump has indicated a focus on lowering drug prices, though the approach remains uncertain. There is speculation about revising Medicare drug pricing provisions from the Inflation Reduction Act.
• Cybersecurity oversight: Given recent high-profile cybersecurity incidents, there is bipartisan interest in strengthening cybersecurity measures across the healthcare ecosystem.
• Health equity and maternal health: These areas might see reduced emphasis under the new administration, contrasting with the strong focus they received under the Biden-Harris administration.
• Environmental sustainability: A focus under the Biden administration, environmental sustainability may not be a priority moving forward.

Congressional Dynamics and Legislative Outlook

A Republican-controlled Congress paired with Republican control of the White House opens avenues for pursuing significant policy changes through what’s known as the budget reconciliation process.

This mechanism allows expedited consideration of legislation affecting spending and revenues – including Medicare and Medicaid spending – and lowers the Senate passage requirement from the normal de facto of 60 votes needed to overcome a filibuster to a simple majority. However, with a continued narrow House margin, Republicans will need strong unity or bipartisan support to effectively pass most healthcare legislation.

New Senate leadership brings a different dynamic to the legislative process. Key healthcare committees will see continuity in leadership, although their roles will reverse with the change in majority.

With Republicans maintaining their House majority, leadership in that body is expected to remain largely unchanged as the 119th Congress begins.

A large group of freshmen Representatives and Senators – including some with significant healthcare industry experience – could create new synergies for healthcare industry-focused legislation.

While Some Things Change, Some Things Remain the Same

The political landscape and its impact on the healthcare industry is in a state of flux, with numerous possibilities on the horizon. As we navigate these changes, it is crucial for stakeholders to stay informed and engaged, anticipating shifts in policy and preparing for their implications.

While the future under a second Trump administration and the 119^th Congress remains uncertain, understanding potential policy directions can help providers, suppliers, payers and policymakers alike strategize effectively in the evolving healthcare environment.

For Premier, the key takeaway is that our approach to advocating for sound, bipartisan policies supported by data, collaboratives and our members’ experience remains consistent.

While the strategies we employ over the next two to four years may shift based on changes in the White House and the balance of power in Congress, our commitment to supporting policies that enhance healthcare value, build a resilient supply chain, leverage technology and close care gaps remains steadfast.

Learn More:

• Stay up to date on our policy statements and perspectives from D.C.