President-elect Joe Biden may be facing off the next two years against Senate Majority leader Mitch McConnell, who is unlikely to depart from his consistent and effective refusal to consider substantive health reforms.
That was Wall Street’s take-away last week. Health stocks soared after it became clear that the Senate would retain its Republican majority. There is a slim chance Democrats could prevail. Both U.S. Senate contests in Georgia denied any candidate 50 per cent of the vote, triggering January runoff elections under state rules. If Democrats won both of those seats, they would have 50 seats and Vice President-elect Kamala Harris would cast the tie-breaking vote as Senate president if needed.
The Dow Jones index of 30 industrial stocks dipped a bit Friday but still closed at 28320, up nearly 7 percent (1820 points) for the week. (26501 on Friday, Oct. 30). The Dow index of health stocks fared even better, closing at 2440, up 13 percent (280 points).
“Bipartisanship on health care is hard to come by, especially for big-ticket items,” Catlin Owens wrote for Axios. “Lawmakers tried to find common ground last year on drug prices and fixes for surprise medical bills, but both of those efforts failed.”
The big exception to meaningful health-care changes would occur if the U.S. Supreme Court strikes down the Affordable Care Act. Vox has a solid explainer on the tortuous legal path of ACA challenges.
If that occurred, Democrats would mount a major offensive to reinstate key ACA safeguards. Without Donald Trump in the White House, Senate Republicans are likely to be more receptive to an ACA compromise. For their part, health care companies and employers have little appetite for returning to pre-ACA rules.
Mercer, the employer benefits firm, polled employers at a webinar last week (before the Presidency had been decided but after it was clear that Republicans likely would retain control of the Senate).
“We asked our participants to consider which of the patient protections mandated by the ACA they would continue even if the law were struck down,” said Tracy Watts, senior partner for health policy. “The top three protections that respondents would keep: no pre-existing condition exclusions (87 percent), preventive care covered in network with no cost sharing (77 percent), and child coverage eligibility to age 26 (64 percent). Fewer employers thought they would continue with no annual dollar limits (33 percent would maintain no limits), or with the current mandated limit on out-of-pocket maximums (44 percent would maintain the limit).”
“We gave participants a long list of possible healthcare priorities for the next Congress and let them pick up to five from the list,” Watts said. “There were two clear winners: reduce prescription drug prices (83 percent) and promote greater healthcare cost transparency (66 percent). Both of those would be a real win for plan sponsors and consumers alike.”