Trump’s regulatory agenda would face challenges in a second term
IF HE WINS a second term, President Donald Trump will have to do some heavy lifting to get a regulatory agenda that’s been derailed by the coronavirus back on track. But he’d also have a new backstop—a court system, including the U.S. Supreme Court, loaded with his nominees.
First, Trump will have to deal with the ongoing COVID-19 pandemic and its economic fallout, including vaccines, therapeutics and testing, as well as financial help for states and providers. He would also have to focus more on coverage than he did during his first term as people lose their employer-based insurance and Medicaid enrollment grows, said Avalere Health founder Dan Mendelson, a former Clinton administration official. A major defeat for the Affordable Care Act at the Supreme Court could move coverage issues to the front of Trump’s regulatory agenda, whether he wants to address them or not.
The Centers for Disease Control and Prevention recently found that 14.5% of adults were uninsured in 2019. Nearly 74% of uninsured adults surveyed said they didn’t have health coverage because they couldn’t afford it. Another 14.6 million people lost employer-sponsored insurance in 2020, the Commonwealth Fund found in October.
“Even if the economy comes roaring back … Medicaid enrollment has a long and sticky tail,” Mendelson said. That’s because people are more likely to take jobs that don’t offer health coverage after a recession.
Experts said Trump would continue to focus on lowering prescription drug prices. Trump signed four executive orders in July to advance policies forcing community health centers that receive 340B drug discounts to cut patients’ costs for EpiPens and insulin, tying Medicare payment for outpatient drugs to international prices, passing along drugmakers’ rebates to patients and allowing personal drug importation. He followed up with an executive order in September, directing HHS to test an international reference-pricing model.
Trump can compel community health centers to fall in line on 340B discounts, Kalderos CEO Jeremy Docken said. But it’s unclear how many of the other policies could take effect since most of the executive orders will get challenged in court or prove unworkable. Trump could also give up on state drug importation because states don’t think it would reduce prices for patients, Docken said. He added that CMS might revisit its 2019 proposal to eliminate drug rebates in Medicare and Medicaid plans by excluding the rebates drugmakers pay to pharmacy benefit managers from protections from anti-kickback laws. Regulators would also have to address drugmakers’ crackdown on 340B discounts.
HHS would also likely focus on benefit design to solve the problem of drug affordability for consumers, Mendelson said.
“Whoever wins the presidency will have to deal with (innovative technologies like) cellular and genetic therapies,” he said. “It’s expensive technology, and
someone’s going to have to figure out how to pay for that, especially in Medicare and Medicaid.”
Experts expect HHS would continue pushing greater transparency, competition among payers and providers, and more consumer choice to lower healthcare costs. The Trump administration last week signed off on its final rule requiring nearly all health insurers and self-insured plans to disclose pricing and cost-sharing information. A similar rule for hospitals is slated to take effect Jan. 1.
Policymakers would likely continue to expand insurance options for consumers in a bid to make coverage more affordable, said Peter Urbanowicz, former chief of staff to HHS Secretary Alex Azar and now co-head of Alvarez & Marsal’s healthcare industry group. CMS has experimented with new ways of providing coverage during Trump’s first term, including short-term plans, healthcare sharing ministries and individual coverage health reimbursement arrangements. But political and legal wrangling still hang over some of these efforts. Trump’s plan to expand access to association health plans, for instance, was invalidated in 2019 by the U.S. District Court for the District of Columbia. The administration appealed to the U.S. Court of Appeals for the District of Columbia Circuit and the case is pending.
CMS might also increase its focus on boosting Medicare Advantage by giving insurers more flexibility to design and market their plans than it did during Trump’s first term, said Eva DuGoff, associate director at consulting firm Berkeley Research Group and former health policy adviser to Sen. Ron Wyden (D-Ore.).
“We would probably see more tipping of the scales to favor MA relative to feefor-service,” she said.
Medicare and Medicaid would continue to evolve too. Experts said the administration would focus on expanding value-based payment in both programs and reform how the Center for Medicare and Medicaid Innovation designs its models. The Innovation Center would likely force providers to take on more risk, mandate more participation and expand provider access to timely information to help them improve quality and lower costs. CMS would also expand state Medicaid waivers, including a bigger push for Medicaid block grants.
The administration could also move on the controversial Medicaid Fiscal Accountability Regulation it shelved in September if Trump is reelected. MFAR has a lot of support inside the White House and among HHS’ political appointees, said Katie Keith, principal at Keith Policy Solutions and an adjunct professor at the Georgetown University Law Center. But the administration would probably change the rule to account for state budget problems caused by the pandemic, experts said.
“There’s a lot of payments that go out that really shouldn’t. And there are a lot of people enrolled who really should not be enrolled,” Urbanowicz said. “Some states play it fast and loose with enrollment.”
Medicare’s dwindling Part A trust fund, surprise billing and the opioid crisis would require attention during Trump’s second term, too.
While the harsh realities of the pandemic will dictate much of the healthcare agenda, staffing changes are inevitable in a second term and could affect the administration’s priorities.
Federal policies could vary considerably if someone with a provider or payer background heads HHS, experts said. For example, it could shape who wins and loses in the battles over prescription drug costs or surprise billing.
“Secretary Azar is very much a person who understands how government works, particularly the federal government and HHS,” Urbanowicz said. If Trump were to replace Azar with a governor or a senator “they may take a different approach on something that they wanted to pursue.”
But the fate of Trump’s second term regulatory agenda could rest on his administration’s ability to develop and issue rules that pass muster with the courts, which has been a serious issue during his first term. According to the Institute for Policy Integrity at the New York University School of Law, just 17% of Trump’s regulations, guidance documents and agency memos had survived legal challenges as of Oct. 27. A Virginia Law Review study found federal agencies typically win about 69% of administrative law cases.
“Anytime you don’t go the legislative route, there’s always the chance that someone is going to (use the law to) gum up the works,” Urbanowicz said.
Sloppy rulemaking, especially on the most politically charged issues, has contributed to the administration’s dismal record, experts said. But it could be easier for Trump to win those legal challenges in the future. The Supreme Court’s 6-3 conservative majority could hear fewer challenges to Trump’s regulatory changes. That would “allow the appellate court to do some of the dirty work” for the high court since more appeals court opinions would stand if the Supreme Court refuses to hear cases it doesn’t want to rule on, Keith said.
According to the Pew Research Center, Trump appointed 53—about 30%— of the nation’s 179 federal appellate court judges.
Experts questioned whether a second Trump administration would use its regulatory power to address the fallout of a Supreme Court ruling stripping away key components of the ACA.
“My sense would be that the president would use it to negotiate a deal” with Congress, Keith said.
“Anytime you don’t go the legislative route, there’s always the chance that someone is going to (use the law to) gum up the works.”
Peter Urbanowicz, co-head of Alvarez & Marsal’s healthcare industry group