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A Midterm Lay of the Land: Health Care in 2019

The 2018 election is now behind us, with a new Congress, new governors and new state legislators about to grapple with America’s biggest challenges.

Every two years, Frontier Group analysts take a step back to review the “lay of the land” on their issue areas. This is the first in a series of posts over the next several weeks reviewing the threats and opportunities facing the American people, our communities, and our environment.

Health care in the U.S. is incredibly expensive, and becomes more so every year. The U.S. spent $3.3 trillion dollars on health care in 2016. That’s $10,348 per person, and nearly 18 percent of GDP. Total spending increased by 4.3 percent from 2015 to 2016, and was up by 55 percent from a decade earlier.

Thus it isn’t surprising that health care was a top concern for voters in the 2018 midterm elections. In mid-October polling by the Kaiser Family Foundation, nearly one-third of voters said health care was more important than any other issue, ahead of the economy and jobs, gun policy, and immigration. Overall, more than 70 percent of voters identified health care as a “very important” factor in how they would vote.

Approximately one-quarter of voters who rated health care as important to their decisions were particularly concerned about the cost of health care, including the cost of prescription drugs. A slightly smaller share were focused on increasing access to health care, while a much smaller number of voters were concerned with the Affordable Care Act, Medicare, or issues specific to seniors. The cost of care was the top health care concern for independent and Republican voters, and the second-ranked concern for Democratic voters.

Though voters generally expressed greater concern about the cost of health care, the midterm election results will more immediately affect health care coverage. Citizens in three states – Idaho, Nebraska and Utah – voted to expand Medicaid, enabling more low-income residents to gain access to subsidized health insurance. Voters in Montana went the opposite way: they decided to end the state’s Medicaid expansion program under the Affordable Care Act. Approximately 300,000 people could gain health insurance from Medicaid expansion in these three states (if elected officials don’t impede implementation), and 130,000 may lose it in Montana. In Maine, Kansas and Wisconsin, the election shifted control of state government to Democrats, who may choose to expand their states’ Medicaid programs.

In the next two years, state and federal policymakers will grapple with legislation that has the potential to modestly reduce the cost of health care. For example, based on legislative action in both red and blue states in 2018, spending on prescription drugs – which accounts for roughly 10 percent of the nation’s health care expenditures – will receive lots of attention. In 2018, states as diverse as Colorado, Louisiana and West Virginia considered (and Vermont adopted) legislation to allow a state agency to import and resell pharmaceuticals from countries with lower drug prices. At the federal level, the Trump administration has expressed support for controlling the price of prescription drugs by allowing Medicare to link the price it will pay for some pharmaceuticals to the price charged in other countries. Democrats have introduced legislation that would use the price of drugs overseas as a trigger for lowering prices and eliminating drug patents in the U.S. It seems conceivable that state or federal elected leaders could reach agreements on these or other policies to curtail prescription drug prices.

Another area of spending in which both Republican and Democratic leaders have expressed interest is surprise medical bills. Patients who visit an in-network facility, such as an emergency room at a hospital covered by their insurance plan, may nonetheless end up receiving care from a doctor at that facility who does not accept their insurance. Though the insurer may pay for the bulk of the care that the patient received, the insurance company will not pay for care from the out-of-network provider. The patient may receive an unexpected and burdensome bill from that out-of-network provider. In 2017 and 2018, states including California, Missouri and New Jersey have limited how much consumers must pay for surprise medical bills. In the same period, Democratic and Republican members of Congress have introduced multiple pieces of legislation that would reduce the problem of surprise medical charges. Limiting patients’ financial responsibility for unexpected out-of-network bills would directly address one of the ways that consumers experience the high cost of health care.

Even if adopted, none of these measures will bring the annual growth in health care spending in line with the growth of household incomes, government budgets or GDP. But it is hard to imagine how a single policy could stabilize health care costs, given how much money the nation spends on health care and the number of people employed in the industry. Finding a reasonable level of health care spending likely will require many discrete policy changes. As the effects of those policies become apparent, elected officials will need to remain engaged so that they can address any new problems through additional policy updates. While the debate over expansion of health care access has been deeply polarized, questions about cost control have not. In fact, many proposals that grapple with the high cost of health care are not clearly associated with one partisan ideology or another. Given this, let’s hope that the next two years provide new opportunities to address this pressing problem.

Photo: Taxrebate.org.uk via Flickr CC BY 2.0