healthcare industry

US election: its impact on healthcare

  • The debate over healthcare issues has heated up over the months leading up to the US presidential election, marking the importance of healthcare in a flurry of other agendas.
  • Abortion rights continue to be a big dividing factor, as restoring federal-level access for abortion seems highly unlikely.
  • The Democratic candidate and current vice-president, Kamala Harris, seems to have greater clarity on her prospective healthcare policy than her rival, the Republican former president, Donald Trump, who’s plans are relatively vague.
  • Both candidates are aligned on pharmaceutical pricing and have promised to lower prescription drug prices, albeit using different methods.

In less than three weeks US voters are set to elect their next president in a “too close to call” presidential race between Ms Harris and Mr Trump. Healthcare has been one of the bones of contention in an antagonistic election campaign, with the debate focused on three areas. The biggest is the future of the health insurance system set up under the 2010 Affordable Care Act (ACA; also known as Obamacare), which Ms Harris wants to strengthen and Mr Trump has again promised to repeal and replace. Related to this are efforts to reduce the pace of medical inflation, particularly for pharmaceuticals. Another point of conflict is abortion, after the US Supreme Court in June 2022 overturned the precedent set in the 1973 landmark case, Roe v Wade, which gave federal abortion rights to all women in the country.

As with most other sectors, a Harris presidency is unlikely to bring major policy changes compared with the current administration. She will retain a focus on risk-pooling and expanding access to healthcare, supported by increasing centralisation of the system. For Mr Trump, the priorities are consumer choice and transparency, with many decisions likely to be left to individual states, courts and providers. Neither side will find the going easy, however, given that we forecast that a divided Congress will make it hard to pass required legislation.

If Ms Harris is elected

Ms Harris has been a staunch proponent of subsidised healthcare access and reducing out-of-pocket costs for all citizens. Under her we expect a widespread expansion and further strengthening of the ACA. She would possibly build on the Biden administration’s proposals, such as dental health coverage via ACA marketplace plans, home healthcare benefits for eligible beneficiaries, making premium tax credits under the ACA permanent, and similar proposals. We also anticipate that Ms Harris would push for the ten remaining states to adopt the ACA’s expansion and achieve her aim to provide “Medicare for all”, although this will be hard to achieve and could provoke legal challenges.

Ms Harris has previously advocated setting up a single-payer public health insurance system, but is likely to retain the current privately funded model under the ACA. However, she is likely to retain the current high level of government subsidies for households opting for ACA policies. During Ms Harris’s time as vice-president, she has worked to limit the financial burden on patients by removing medical debt from credit reports. Her campaign even proposes to waive some existing medical debt by using leftover relief funding from the pandemic if she wins this election. Overall, the risk-pooling and redistribution initiatives undertaken by the Biden administration will be carried forward by a Harris presidency, with a focus on supporting low-income groups.

A Harris presidency will also support pharmaceutical provisions and price negotiations under the Inflation Reduction Act (IRA) as planned in 2025. Ms Harris played a crucial role in the vote on IRA, which allowed the Biden administration to negotiate drug prices for Medicare, the federal health insurance programme primarily for the elderly, directly with pharmaceutical firms. The first series of drug price negotiations taking effect in 2026 include blood thinners, arthritis and diabetes medications, among others. Although the government is not mandated to reveal the actual cost of these drugs after negotiations, it is widely expected to save more than US$1.5bn a year. We anticipate the pace of these negotiations to accelerate and the number of drugs involved to increase if Ms Harris is elected.

Ms Harris and her running mate, the Democratic governor of Minnesota, Tim Walz, have been more supportive than any other previous campaigns to birth control and fertility treatments, among other reproductive rights. If elected, Ms Harris has pledged to restore the right to abortion under national law and reinstate protections guaranteed under the now overturned Roe v Wade decision. Additionally, Ms Harris has been a strong supporter of rights to contraception and fertility treatments, including in vitro fertilisation treatments (IVF). Mr Walz has also been an advocate for reproductive rights, and has shared his personal experience with fertility treatments during the campaign.

Together they argue that the lack of federal legislation granting abortion access has not only jeopardised reproductive health but also exposed abortion seekers and providers to criminal proceedings. Within the first year after Roe v Wade was overturned, more than 200 pregnancy-related prosecutions were recorded, more than half of which were in Alabama. Ms Harris plans to work with a divided Congress to bring in a law to codify nationwide access to abortion up until foetal viability, although this will be easier said than done. With the composition of the US Supreme Court unlikely to shift from its current six-justice majority of Republican appointees, upholding federal abortion access will be difficult.

If Trump is elected

Mr Trump’s record on healthcare and pharmaceutical legislation is mixed. During this presidential campaign he has vowed to protect Medicare and social security from funding cuts. However, these promises run counter to the significant cuts to other public health programmes during his previous term. Despite failing to repeal or replace the ACA in his previous term, Mr Trump has made similar vows to replace the ACA with something better this time. Alternately, his vice-presidential pick, the Republican senator of Ohio, JD Vance, has said that a second Trump administration would work towards deregulating health insurance markets and promoting choice by introducing more affordable but limited policies. Mr Trump may succeed in weakening some ACA provisions and allowing more state-level variation, as he did in his previous term.

The Trump campaign has broadly aligned with Ms Harris on the need to contain drug price inflation by taking on “Big Pharma”. Mr Trump has promised to end pharmaceutical shortages within the US and reduce supply-chain constraints by reshoring production of essential medicines. According to the American Society of Health-System Pharmacists, the pharmaceuticals crisis had worsened to hit an all-time high, with 323 active drug shortages in the first quarter of 2024. These shortages included cancer therapies, emergency medications and other chronic disorder drugs. During his previous term, Mr Trump signed multiple executive orders including some that lowered prices for certain essential medications, addressed surprise medical billings and expanded access to affordable life-saving drugs. We expect him to continue introducing executive orders, rather than opting for the legislation route. Mr Trump will not support the drug-price negotiations mandated under the IRA, which run contrary to the Republican Party’s free-market principles. We expect this programme to be set aside completely, or delayed by administrative hurdles.

Mr Trump has been supportive of the abrogation of federal abortion rights, which has resulted in some states severely limiting access to abortions. Early on in his campaign he had presented an unclear, ambiguous stance on abortion; however, during the presidential debate in September he lauded himself and a conservative-dominated Supreme Court for striking down Roe v Wade. In the event of a second Trump presidency, decisions over abortion access will rest with individual states, but those upholding abortion rights are likely to face legal challenges. Any federal funding for related services will be cut. Mr Trump has not detailed plans regarding IVF, contraception access, and other aspects of reproductive health. He has also promised to provide free IVF treatment and ensure universal access to contraception, but Republican senators (including his running mate, Mr Vance) have voted against a bill guaranteeing national access to IVF and other related reproductive treatments twice this year.

In spite of stark policy differences and social stances, we expect overall healthcare expenditure to rise steadily under either a Harris or a Trump administration. Although both front-runners are focused on curbing drug pricing and taking on big pharma, total spending will continue to be driven upwards by patient demand, an ageing population and incentive structures that encourage overtreatment. Our current forecast, based on a Trump victory, is for total healthcare expenditure to reach 16.7% of the country’s GDP by 2028, still higher than before the covid-19 pandemic.

The analysis featured in this article can be found in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify prospective opportunities and potential risks.