On the heels of the recent U.S. election, healthcare CEOs and community leaders are discussing the impact the next Donald Trump presidency will have on American healthcare. Reviewing the prior Trump administration’s focus on repealing and replacing the Affordable Care Act (ACA) and his positions on healthcare reform and deregulation, there are ten key areas where, we believe, the President-elect’s policies could influence the U.S. healthcare industry.
1. Affordable Care Act (ACA)
- Repeal and replace efforts: In the previous term, the Trump administration attempted to repeal the ACA, commonly known as Obamacare, and replace it with alternative policies. A new Trump administration will likely revisit this goal. While outright repeal may be difficult due to the number of Americans who depend on it, the Trump administration may seek to peel back the ACA by reducing funding for specific programs, relaxing enforcement of the individual mandate (which was effectively eliminated in 2019) and promoting state-based initiatives for healthcare reform.
- State flexibility: Trump has been a proponent of giving states more flexibility in managing Medicaid programs and healthcare reform. His administration could continue pushing for Medicaid block grants or other forms of federal assistance that give states greater control over their healthcare programs, potentially leading to a patchwork of state-level healthcare policies with varying levels of access and quality.
2. Medicare and Medicaid
- Medicare advantage and prescription drug pricing: Trump previously supported Medicare Advantage plans, which provide private alternatives to traditional Medicare, in an effort to reduce government spending on healthcare. Under a second term, he may continue to advocate for expanding these programs. Additionally, there could be efforts to negotiate prescription drug prices directly with manufacturers, though the effectiveness of these efforts is uncertain.
- Medicaid cuts: Trump’s administration will continue efforts to curb Medicaid expansion or make changes to eligibility and work requirements. His administration’s past budget proposals have sought to cut Medicaid funding and scale back its scope, reducing coverage for low-income individuals. While 40 states and Washington, D.C., have adopted expansion based on evidence that it has lowered the overall cost per state, the future of Medicaid expansion could depend on state-level decisions. More specifically, states that have opted into Medicaid expansion may continue to face uncertainty if federal support is reduced or restructured. This may be particularly destabilizing in states such as California, Illinois, and New York.
3. Healthcare insurance market
- Insurance market reforms: During his first term, Trump worked to dismantle several ACA regulations, such as the requirement for insurers to cover essential health benefits and the rules requiring insurance plans to cover pre-existing conditions. Despite the general popularity of the ACA, he may continue to pursue eliminating these protections by easing the regulatory burden on insurance companies, potentially allowing for less comprehensive health plans (such as short-term, limited-duration plans). If Congress does not support such actions, the Trump administration may pursue the actions through executive orders or though court intervention. (See below on Judicial Impact.)
- Health savings accounts (HSAs): The prior Trump administration supported expanding the use of Health Savings Accounts (HSAs) as a way for individuals to save pre-tax dollars for healthcare expenses. In a new presidency, he will likely push for policies that make HSAs more accessible or increase the contribution limits. While proponents say enhancing access to HSAs will give higher-income individuals more ways to pay for healthcare out-of-pocket, critics point out that they will be of limited benefit to those without the financial means to save.
4. Drug pricing and pharmaceutical industry
- Price transparency and drug pricing: One of the most notable healthcare initiatives from the prior Trump administration was an attempt to reduce prescription drug prices through initiatives like the “American Patients First” blueprint. The prior Trump administration proposed reforms to encourage price transparency in hospitals and prescription drug pricing, and Trump’s second term will likely see continued efforts in this area. While the pharmaceutical industry will push back against more aggressive pricing controls, Trump may continue pursuing policies that create more market competition, resulting in lower drug costs.
- International price indexing: Trump’s prior administration proposed tying U.S. drug prices to those in other countries, a controversial measure. Under the new administration, he might again pursue such measures, potentially leading to lower drug prices, but it will be met with significant pushback from the pharmaceutical industry.
5. Social safety nets and health equity
- Health inequities: Trump’s approach to healthcare is intertwined with a broader political philosophy of reducing government spending and taxes on social programs. While he has voiced support for some segments of the population (e.g., veterans and seniors), his policies are generally focused on a market-driven approach to healthcare. Critics argue these policies could exacerbate health disparities, particularly for low-income, urban, and minority populations who rely on Medicaid or subsidized insurance. Further, opponents suggest that cities and communities may see reduced funding for programs designed to improve wellness and healthcare access, likely widening health disparities for large urban areas such as New York, D.C., Chicago, Los Angeles and San Francisco.
6. Rural healthcare
- Support for rural health providers: Trump has promised to support rural healthcare providers and expand access to care. The new administration may push for policies reducing the regulatory burden on rural hospitals and increasing their funding.
- Expanding telemedicine and APPs: The prior Trump administration supported the expansion of telemedicine, which could continue to improve access to healthcare in geographically remote areas. In addition, the administration may promote fewer state regulations on Advance Provider Practitioners (APPs) to help address the shortage of physicians in the rural and less populated states.
7. Government antitrust oversight
- Antitrust enforcement: One of the hallmarks of the prior Trump administration’s economic policy had been a push for deregulation across industries, including healthcare. While some significant deals (e.g., CVS-Aetna) were scrutinized for anti-competitive concerns, reduced regulations or transaction scrutiny could make it easier for healthcare organizations to navigate complex compliance requirements, thus encouraging consolidation and acquisitions. As companies seek efficiencies or scale, the healthcare industry will likely see more deals in pharmaceuticals, health insurance, and hospital systems.
- Potential for increased consolidation in the private market: Less government intervention might encourage more private equity activity in healthcare, as private firms would face fewer regulatory hurdles when consolidating providers or acquiring healthcare businesses.
8. Trade and international policy
- Supply chain and global markets: Healthcare companies that rely on global supply chains (pharmaceuticals, medical devices, and biotech) may see changes under the new administration’s trade policies. A potential increase in tariffs or new trade deals could provide opportunities for international M&A, especially with healthcare companies in emerging markets. Alternatively, any escalation of trade tensions (e.g., China) could disrupt global supply chains and encourage consolidation among domestic firms to mitigate risk.
9. Public health and pandemic management
- Pandemic preparedness and response: A second term, especially the potential appointment of Robert Kennedy, Jr. to the Department of Health and Human Services, could see a shift toward less government intervention in public health crises, emphasizing individual decisions and state control over health measures. In the case that the country is faced with another pandemic or public health crisis, a Trump administration will likely focus on keeping the economy open and minimizing restrictions, with potentially fewer federal mandates than under past administrations.
- Vaccination and healthcare access: Trump’s stance on vaccines and public health mandates often conflicted with public health officials, and his second term will likely have less centralized healthcare mandates, including around vaccinations and preventive care.
10. Court actions and rulings
- Judicial appointments: Trump’s judicial appointments, particularly to the Supreme Court, could have long-term effects on American healthcare. With a more conservative judiciary, challenges to the ACA or other healthcare regulations could favor conservative interpretations of the law. If there is another push to repeal or reduce the benefits of the ACA, the courts could play a decisive role in shaping the outcome.
The pending Trump presidency will likely focus on disrupting and reshaping America’s healthcare through deregulation, reducing federal spending, and giving states more control over healthcare policies. While a full repeal of the ACA might be difficult, significant efforts to peel back parts of the law, particularly Medicaid expansion, are possible and may be supported by judicial action. Health insurance markets could become less regulated, and there may be attempts to expand alternative options like Health Savings Accounts and Medicare Advantage. Further, less scrutiny of antitrust areas will provide for large-scale mergers, while the supply chains of some critical sectors may be interrupted. From a social perspective, Trump’s critics argue that the administration’s anticipated policies will deepen disparities in healthcare access, particularly for vulnerable and urban populations. A Trump alternative approach to current structures may focus on laissez-faire or market and community-driven solutions rather than broad, systemic reforms to expand access to care for all Americans.