Our colleague Robert F. Atlas, President of EBG Advisors, Inc., published an advisory that will be of interest to stakeholders in the health care industry: The After-Effects of Graham-Cassidy’s Demise.
Following is an excerpt:
Taken together, the failure of the ACA repeal-and-replace effort (for now) bodes well for health care providers. The percentage of the population that’s covered—and thus is less likely to represent uncompensated care for providers—will remain fairly high, notwithstanding some erosion if the individual market isn’t bolstered.
Similarly, insurers will continue to have most of the enrollees whom they gained thanks to the ACA. True, at least with regard to exchange enrollees, the insurers may see a slightly worse adverse selection that would challenge profitability, but they can raise premiums without causing too many defections among the majority of enrollees who are eligible for federal premium subsidies. And the continuation of high levels of Medicaid enrollment benefits many insurers as well. Nearly all states contract with private health plans to coordinate care for Medicaid beneficiaries in return for capitation payments; in the aggregate, approximately one-half of all Medicaid dollars run through private plans.
For most employers, the direct effects of Graham-Cassidy and other GOP repeal-and-replace measures were never very strong. Had Graham-Cassidy passed, the mandate for employers with 50 or more workers to offer health insurance would have disappeared, but with the labor market tightening, few large employers are inclined to stop offering health benefits anyway.
Manufacturers of pharmaceuticals stand to benefit—or not to be harmed—thanks to the continuation of the ACA and Medicaid laws in their current forms. The more people who have health insurance generally, the more people who have coverage for prescription medications. Medical device makers, on the other hand, were counting on Graham-Cassidy to repeal the medical device tax that they believed hurt them. Though, they may have reason to hope that the tax will be repealed or at least delayed in other vehicles, as there are plenty of Democratic legislators who agree with Republicans that the tax ought to go.