2018 Outlook on Politics and Policy: Insurers will come out ahead

Despite a year of policy delays, glitches and uncertainty, insurers may be the ones to come out ahead of other segments of the industry in 2018. Uncertainty and policy confusion will no doubt continue this year since House and Senate Republicans are already on different pages when it comes to healthcare reform.

Now that the GOP’s $1.5 trillion tax overhaul is done, House Speaker Paul Ryan (R-Wis.) is setting his sights on entitlement reform as a way to rein in costs. This could mean trimming welfare, Social Security and Medicaid, but he has signaled Medicare provider cuts are also on the table.

In the Senate, Majority Leader Mitch McConnell (R-Ky.) and members of the GOP leadership consortium—Sens. John Thune of South Dakota and John Cornyn of Texas—say they want to go the bipartisan route and look at individual market stabilization measures proposed by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.)

But then GOP Sens. Bill Cassidy of Louisiana and Lindsey Graham of South Carolina want to revive their proposal to block-grant federal money for Medicaid and the Affordable Care Act exchanges. This idea was killed last summer during the Senate’s failed attempts to repeal the ACA.

Medicaid, which Republicans wanted to convert to a capped per-person payment structure, could get new attention.

“It makes a lot of sense,” Thune said.

Meanwhile, President Donald Trump could use executive branch power to continue striking major blows to the ACA’s individual market risk pool.

So 2018 is shaping up to be another sink-or-swim year in healthcare: Adapt to the new rules—or lack of rules—or try to write them yourself.

Who’s going to do well in this environment? Whether you look at Centene Corp. in the individual market or the likes of UnitedHealthcare, CVS Health and Aetna competing for greater market share, including the Medicare Advantage space, the payer community is poised to fare well in the new Wild West of policy. This despite the fact that last year’s tax overhaul effectively killed the individual mandate by eliminating the penalty for people who fail to obtain coverage.

For other stakeholders—hospitals and providers who have watched helplessly as key programs lapsed without Congress mobilizing to fund them, or the Trump administration pivoting on value-based payment initiatives—the future isn’t necessarily so bright.

As we tumble into 2018, Congress still has a long must-pass, way-beyond-deadline healthcare agenda. But from what’s known, here’s an early look at Modern Healthcare’s projected winners and losers in 2018.

UNFINISHED BUSINESSLawmakers return to the nation’s capital with a lot of work left over from 2017.

• Children’s Health Insurance Program: The short-term budget patch approved in late December added $2.9 billion to CHIP, funding it through March.

• Medicare extenders: The enhanced low-volume adjustment and the Medicare dependent hospital program were lost in the shuffle in the weeks leading up to the short-term spending deal.

• Affordable Care Act taxes: There have been some bipartisan conversations about delaying the Cadillac tax, the employer mandate, the health insurance tax and the medical-device tax, but both sides are still talking about compromises to pay for them.

• Individual market stabilization: The government is paying out more in premium tax credits now that cost-sharing reduction payments are gone. There’s a rift within the GOP on how to handle CSRs.

• Opioid epidemic: Leading senators on both sides want to give President Trump’s public health emergency declaration heft with funding, but so far they haven’t agreed to a number.

• Drug pricing: Health committees in both the House and Senate have started to look at drug pricing and HHS Secretary-designate Alex Azar addressed the issue at length in his first Senate confirmation hearing.