The Democratic Party’s two Senate victories in Georgia spell more flexibility for President-elect Joe Biden’s administration to implement healthcare reforms, and that could mean substantial changes for insurers and the pharmaceutical industry, but not for devicemakers, the investment research firm Morningstar said in a Jan. 6 report.
Elements of President-elect Biden’s healthcare plan, including increasing tax credits associated with coverage on individual exchanges and expanding the Medicaid population, could benefit large insurers like Anthem and Centene with large presences on individual exchanges and in Medicaid-managed contracts, Morningstar wrote.
A public option’s effect on insurers would depend on the option’s price. Based on its own price estimates, Morningstar said a public option would primarily improve affordability on individual exchanges rather than mark a shift away from employer-based insurance.
Equally as influential is who exactly a public option would cover. Much of the potential mix shift risk for insurers would be eliminated if the option is limited to those who can’t get employer-based plans. If quazi-Medicare Advantage plans from private insurers are allowed alongside a public option, it could be a boon for the private insurance industry, Morningstar wrote.
Morningstar does not predict the changes will impact the device industry too much, though if the policy changes create more healthcare access as intended, devicemakers could expect higher patient volumes, if trends hold from the ACA’s implementation.
As devices tailored to those covered by Medicare are already accessible, devicemakers with products that fall outside of Medicare would likely see more of a benefit from greater access, Morningstar wrote.
A potential change to Medicare Part D regarding out-of-pocket payments for patients in the catastrophic phase could affect the pharmaceutical industry. Drug companies might have to foot more of the bill for seniors purchasing specialized drugs, which would likely affect the industry by 2 percent on the top line, Morningstar wrote. But it would also nix a voter complaint about high out-of-pocket costs for specialty drugs, removing a threat for pharmaceutical companies that has stunted their valuation multiples.
More articles on leadership and management:
Biden inauguration plans amid COVID-19: 4 things to know
Sutter exec Dr. Martin Brotman dies
‘Terrible, no good year for rural health’: Why healthcare leaders are leaving small-town America
© Copyright ASC COMMUNICATIONS 2021. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.
