With the 2024 presidential election behind us and Donald Trump securing his second term, healthcare businesses now face the prospect of significant policy shifts. Given his past healthcare initiatives and campaign promises, Trump’s administration is expected to drive changes across the sector. Here’s a closer look at the key areas where his approach could reshape healthcare in the United States, and how healthcare businesses, insurers, providers, and consumers will likely be impacted.
1. Potential Repeal or Restructuring of the Affordable Care Act (ACA)
One of Trump’s most consistent goals throughout his political career has been to dismantle or overhaul the Affordable Care Act (ACA). Now, with a second term ahead, it’s expected that Trump will continue his efforts to alter or repeal parts of the ACA, focusing on key provisions such as insurance market reforms, Medicaid expansion, and premium subsidies.
Full Repeal:
A full repeal of the ACA would eliminate its essential provisions, including the individual mandate, Medicaid expansion, premium subsidies, and protections for individuals with pre-existing conditions. While this could lower federal spending on healthcare, it would likely result in millions losing coverage, destabilizing the insurance market, and increasing the number of uninsured Americans.
Partial Repeal via Budget Reconciliation:
Alternatively, Trump may push for a more limited repeal using budget reconciliation, a process that requires only a simple Senate majority. This would likely target elements like subsidies, Medicaid expansion, and other budget-related provisions, while leaving some ACA reforms (e.g., protections for pre-existing conditions) intact. However, without subsidies and mandates, premiums could rise significantly, pushing healthier individuals out of the market and creating a “death spiral” of increased premiums and declining coverage.
Impact on Health Insurance Coverage:
Studies suggest that a full repeal could leave up to 24 million Americans uninsured, with Medicaid enrollment falling by over 14 million and coverage from the nongroup market dropping by 6 to 9 million. A partial repeal might result in even higher uninsured numbers, potentially impacting up to 32 million people. For healthcare businesses, this could lead to increased uncompensated care, market instability, and financial strain on insurers and providers.
2. Medicaid Funding and Flexibility for States
During his first term, Trump sought to reduce federal spending on Medicaid by offering states greater flexibility to manage the program through block grants or funding caps. A second Trump term could bring back efforts to give states more control over Medicaid, potentially lowering federal Medicaid expenses but also increasing the risk of reduced benefits and eligibility for low-income Americans.
Block Grants and Caps:
A block grant system could give states a fixed budget, rather than matching federal funds, potentially curbing overall spending. However, during economic downturns or public health crises, states may face budget shortfalls and could respond by cutting benefits, narrowing eligibility, or reducing provider payments, which could leave low-income patients with less access to healthcare.
Work Requirements:
Trump’s administration also supported implementing work requirements for Medicaid beneficiaries, a policy that could return in his second term. This could further restrict access to Medicaid for individuals who don’t meet certain employment or training requirements, potentially pushing millions out of coverage.
For healthcare providers, these changes could lead to greater financial pressure due to reduced Medicaid enrollment, less coverage for low-income patients, and increased uncompensated care.
3. Drug Pricing Reform
Trump has been a vocal critic of high prescription drug prices, and his second term is likely to focus on continuing efforts to lower costs, which could have significant implications for pharmaceutical companies, insurers, med spas, compounding pharmacies, and healthcare providers.
Price Negotiation and Caps:
One of Trump’s key proposals has been to allow Medicare to negotiate drug prices directly with pharmaceutical companies, a policy that could gain further traction in his second term. Additionally, price caps or other mechanisms to curb drug cost inflation could put downward pressure on prices, potentially affecting pharmaceutical company revenues but lowering costs for patients and providers.
Promotion of Generic Drugs:
Trump has also pushed for expanded approval of generic and biosimilar drugs to increase competition and drive down prices. In a second term, this push could continue, benefiting hospitals, clinics, and consumers by lowering drug costs. This could be good news for Semaglutide and Tirzepatide.
4. Telehealth Expansion and Deregulation
Telehealth adoption surged during the COVID-19 pandemic, and Trump’s administration supported the expansion of telemedicine, especially for rural areas and underserved populations. Now that telehealth has become a permanent fixture in the healthcare landscape, Trump may look to deregulate the sector further and invest in infrastructure to support its growth.
Continued Deregulation:
Trump is expected to make permanent the regulatory relaxations introduced during the pandemic, such as lifting restrictions on cross-state telehealth services and expanding the types of healthcare services that can be delivered remotely. This could benefit telehealth providers, making it easier for them to reach a larger pool of patients.
Infrastructure Investments:
Given the importance of reliable broadband access for telehealth, Trump could push for additional investments in digital infrastructure, particularly in rural areas with limited broadband access. This could further expand the reach of telemedicine, creating new opportunities for healthcare providers and telehealth businesses. We expect additional steps to allow for the broader use of telemedicine.
5. Potential Cuts to Federal Health Programs and Funding
In line with his previous budget proposals, Trump may seek to reduce funding for health agencies such as the Centers for Disease Control and Prevention (CDC), the National Institutes of Health (NIH), and other public health programs.
Reduced Public Health Funding:
Cuts to public health funding could stall critical research, diminish resources for state and local health departments, and limit the effectiveness of public health initiatives. Healthcare institutions that rely on federal grants for research and disease prevention could face significant financial challenges.
Lower Subsidies and Financial Assistance:
Trump may also revisit subsidies for low-income Americans, potentially decreasing access to care for vulnerable populations. This could increase the financial burden on healthcare providers who serve a large number of uninsured or underinsured patients.
6. Immigration Policy and Healthcare Staffing
The healthcare sector relies heavily on immigrant labor, particularly in nursing, primary care, and specialty fields. Given Trump’s past positions on immigration, stricter policies could exacerbate the existing workforce shortage in healthcare.
Limits on Work Visas:
Trump may implement tighter restrictions on work visas for foreign healthcare professionals, which could limit the flow of qualified workers into the U.S. This could be particularly problematic in underserved areas or specialties with existing workforce gaps.
Increased Training Needs:
To address workforce shortages, healthcare organizations may need to invest more in training and recruiting domestic workers, which could increase labor costs and strain existing resources.
With Trump now set to lead the country for a second term, healthcare businesses must prepare for potential changes across multiple areas, including ACA reforms, Medicaid restructuring, drug pricing, telehealth, and federal health funding. While these policy shifts may present challenges—particularly in terms of coverage, market stability, and workforce shortages—there could also be new opportunities in telehealth, drug pricing reforms, and market deregulation. Healthcare organizations, providers, and insurers will need to closely monitor these developments and adjust their strategies to adapt to the evolving landscape of American healthcare.