In the early morning hours of November 9, 2016, Americans who stayed up late enough, received the news that the next president of the US would be, without a doubt, recount or lawsuit – Donald J. Trump. This future administration is poised to usher in a new era in America that could significantly impact not only healthcare, but the country as a whole with a shift in the philosophy of government. From a model of government that does more, yet could do better directing aspects of everyday life to principles of less government, less regulation, and more entrepreneurial freedom with lower taxes and increased personal responsibility.
While the election was long and stressful – many especially in the healthcare industry, are pleased with the outcome, anticipating real change in the form of new healthcare options and systems. President-Elect Trump has stated that he would like ObamaCare repealed and replaced with more custom, value-oriented, and affordable options, making the choice for quality healthcare coverage a personal decision rather than a restrictive requirement from Washington.
Information and policy proposals that have been put forward by President-Elect Trump’s transition team are to the point, and include common sense approaches to healthcare reform. More details are likely to follow, but our goal is to provide you with a forecast of where healthcare could be in a few months and the impact that proposed changes could have on your agency.
- Repeal and Replace ObamaCare (Affordable Care Act)
Almost everyone can agree that ObamaCare isn’t working well – whether you are a provider or a patient. The system is bloated, cumbersome and inflexible. Even with the maximum premium assistance allowance, policies are so expensive that many still cannot afford them and choice the tax penalties as the lesser of two evils. Even more are forced to delay or forego care to avoid deductibles they can’t afford.
Replacing ObamaCare with another system that allows for more choice, less regulation, and the ability to choose a plan that fits your needs is essential to healthcare of the future. Trump also believes in making health insurance a choice – not a requirement, and strongly favors the removal of the individual mandate.
The new system is yet to be hinted at for providers. The last major overhaul for agencies introduced the current reimbursement system – PPS. Prior to PPS, home health agencies billed per visit – making more money by providing more visits rather than providing care efficiently, based on the level of severity and patient diagnosis. Whichever reimbursement model is used, a heavy focus is going to be placed on fraud and how to combat waste and abuse. A model currently published by Republican Congressman Paul Ryan is likely to be a starting point, favoring heavy usage of private insurance and removing the government from much of the administration of healthcare. Effectively, Ryan’s plan is to allow Americans to choose their own healthcare plan and not force Medicare as the default coverage for the elderly; similar to the current ability to select Medicare Advantage plans.
- Purchase Health Insurance Across State Lines
Each state has its own regulations for allowing insurance companies to sell policies to residents. Trump’s plan proposes the removal of those restrictions, allowing residents in Florida to purchase a plan from Texas or allowing resident in Massachusetts to purchase a plan from an insurance company in Alaska.
The point is: choice and affordability – simple economics – you get what you pay for, essentially. Trump’s goal is to make healthcare affordable not only for individuals, but for businesses like yours. To purchase and provide health insurance coverage for necessary, quality care at a reasonable price, helps with recruiting as well as your bottom line.
- Deducting Health Insurance Premiums
Businesses are already allowed to deduct health insurance premiums as a business expense. Under Trump’s plan, individuals would be allowed to deduct premiums paid on their tax returns. To some extent this already happens for self-employed individuals but this deduction would apply to individuals who purchase health insurance on their own and are employed by an agency like yours.
- Health Savings Accounts
Trump would like all Americans to have the ability to contribute to life-long savings accounts that can be used for their own personal health needs, their family and dependent’s health needs, but also carried on after death without a tax consequence. The HSAs would be designed to help younger Americans who don’t require consistent healthcare services, but could require catastrophic coverage, enabling them to use the HSA funds to cover expenses and deductibles.
- Price Transparency
President-Elect Trump’s plan is for you to open up your fee schedule. Let patients know how much you charge per visit and whether or not a competing agency is cheaper. For home health agencies, this really isn’t a major concern as most pricing is predetermined either through PPS reimbursement or through private insurance contracts. Private pay and private duty providers are already doing this so it’s not a major industry shakeup.
However, for physicians, hospitals and other providers who often just provide care and then bill a patient for services, a transparent fee schedule is a major shakeup. There are already many physicians who have moved to a concierge service or private pay model where fees are disclosed up front, but this is still a new operating concept that is primarily found in larger cities.
- Medicaid: Block Grants
For many agencies – this could be a positive impact. More funds available to the states by reducing CMS’ involvement with Medicaid means states can spend more on providing patient care, likely benefiting home health. Block grants would allow chunks of money to be allocated to each state. Each state would then decide how to spend those Medicaid funds rather than being told how to spend them. Once a state received its grant for the year, that would be it – no additional funds would be available. It would be a one and done payment for a 12 month period.
- Drug Approvals
Trump would like to have the process for approving drug distribution in the US reduced so that the overall effect would be to reduce the price of those drugs. Therefore, patients and providers would be able to purchase drugs for use at lower rates, saving everyone money. Trump goes further to remove restrictions on purchasing drugs from other safe overseas options and allowing the government to negotiate with drug companies to buy in volume for Medicare beneficiaries.
In addition to healthcare, President-Elect Trump has also stated that he plans on making significant changes to businesses taxes. The current rate for an agency owner can vary greatly based on their type of corporate structure – a corporation, S-Corporation or a partnership. However, Trump would like to simplify this structure for tax purposes and institute a flat tax of 15% on business earnings. This change would result in a positive impact and huge savings for many agency owners.
Regulation is also likely to be examined which would be great news. Reduced regulation for your agency could provide much relief. We could possibly see many annoying requirements removed or reduced. Those could include Face to Face, Value Based Purchasing, Prior Approval/Authorizations, and the job killing DOL overtime rule.
While we don’t know exactly what will happen in healthcare, we know this – big changes are coming and they are likely going to leave consumers happy. What we don’t know yet is how providers will fair. Likely, providers are going to be hit harder, but consumers and patients will benefit. We will be coming along for the ride with you and will be featuring special sections in every edition going forward to monitor the new administration and its impact on you.