02 Jan Healthcare and Government: 3+ Predictions for 2019
Making predictions in any area is always a dicey proposition. But after listening to our astute Healthcare Members throughout the year, reading the tea leaves – and a lot of articles, blogs, and op-ed pieces, I’m pretty confident in these three-plus predictions for Healthcare. They all reflect the impact of government’s role in funding 64% of U.S. healthcare – and 71% in the Golden State, according to PNHP, the Physicians for a National Health Program.
#1 The ACA is here to stay. Again.
After hours on Friday night, December 14th, Reed O’Connor, a Texas district court judge, ruled that the Affordable Care Act was unconstitutional. His rationale for siding with a coalition of conservative states in a lawsuit challenging the law’s constitutionality was because the 2019 $695 tax penalty for not having insurance was eliminated by last year’s Tax Reform. So, he ruled, the entire healthcare law is invalid, since the insurance requirement “is essential to and inseverable from the remainder of the ACA.”
Of course, immediately a coalition of 17 Democratic attorneys general, under the leadership of California’s Xavier Becerra, jumped on the case stating elimination of the federal “uninsured penalty” does not negate the ACA’s constitutionality. But the media attention was substantial enough to make healthcare stocks plunge. Then, on December 30th, O’Connor agreed that the law – which has enabled nearly 20 million additional Americans to have health insurance – can remain in effect while under appeal. While some believe the next stop for this suit will be the Supreme Court, I’m predicting that it won’t get that far. The guarantee of coverage for pre-existing conditions alone, has ingrained the Law into the fiber of American culture. And, just like Social Security and Medicare, it will stand.
#2 “Medicare for All” will be the Dems 2020 campaign theme
Elizabeth Warren has already announced her presidential exploratory committee, making her the first candidate to officially throw her hat in the ring. She, along with the 70 members of the House who founded the Medicare for All Congressional Caucus – and 70% of Americans, according to a Reuters survey released in August, also supports creating a health insurance program that would be run by the federal government and would cover all Americans, replacing today’s job-based policies that provide coverage to about half the nation.
And it’s not just Elizabeth and Bernie Sanders singing the “Medicare for All” theme song. On December 29th, California Senator Kamala Harris wrote an impassioned plea for Medicare for All in The New York Times, stating she was among the first to sign the bill when it was introduced in the Senate last year. In her “Opinion” piece, she recounts the tear-jerking story of her mother’s terminal illness – interweaving her own political career history, and a catalogue of horrors, should the Law be overturned. You could definitely hear the echo of a campaign speech, since in spite of all her other concerns as she realized she was about to lose her mother to cancer, financial anxiety was not one of them – thanks to Medicare.
#3 ITM, Medicare Advantage will continue to grow by double-digits
While Democrats will be campaigning for Medicare for All, Medicare Advantage plans for seniors continue to rake in members. In fact, CMS is projecting an 11.5% increase to 22.6 million (more than 36%) of their 60 million-plus beneficiaries will be in MA plans in 2019, an all-time high. And why not? “The steps that the Trump Administration has taken to improve and drive competition in MA means more savings, more benefits, and lower costs for seniors,” according to CMS Administrator Seema Verma. Specifically, average premiums will be the lowest in the last three years, with 46% of enrollees having zero premium. And, about 270 plans are allowing their 1.5 million enrollees to access several expanded benefits, including adult day care, in-home and caregiver support services, home-based palliative care and therapeutic massage. And next year, plans will have even greater flexibility to attract new members with supplemental vision, dental, hearing, OTC items, meals, nursing hotlines, and med service transport on their menu of offerings.
With 600 new plans in 2019, 99% of Medicare eligibles will have access to an MA plan. Among those new plans will be venture-backed, tech-enabled darlings, including: San Francisco-based Clover Health (an MA PPO that uses data analytics and AI to serve seniors in Georgia and Texas, and will be expanding coverage areas in New Jersey and Pennsylvania, and adding the Charleston, El Paso, Nashville, and Tucson markets); Bright Health (with a current $950 million valuation, will likely be Minnesota’s first unicorn); Iora Health (is a Boston-based, team-oriented MA primary care provider); Devoted Health (while also based in Massachusetts, the MA HMO founded by serial health-tech entrepreneur Park brothers has a $1.8 billion valuation and serves members in Florida and West Virginia); and Oscar Health (in which Alphabet recently invested $375 million – bringing it to a $3.2 billion valuation – so they could expand into new business segments, including MA).
Plus Someone will campaign on “Medicare Advantage for All” – and they could well be a Republican!
by Mimi Grant, President, Adaptive Business Leaders (ABL) Organization – Round Tables and Events for CEOs of Healthcare and Technology Companies