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Expect renewed embrace of ACA and more global collaboration on the pandemic from Biden’s healthcare picks

Ingrid Stiver Senior Manager, Health Research Institute, PwC US December 10, 2020

President Joe Biden nominated California Attorney General Xavier Becerra for secretary of Health and Human Services (HHS) and is expected to appoint Dr. Rochelle Walensky, chief of the Division of Infectious Diseases at Massachusetts General Hospital and professor of medicine at Harvard Medical School, as director of the Centers for Disease Control and Prevention (CDC).

Becerra is known for leading the defense of the Affordable Care Act (ACA) as attorney general of California in the California v. Texas case that was heard in November by the US Supreme Court, with a decision expected in the spring. Walensky is known for her research and work on HIV/AIDS.

The Federation of American Hospitals and the American Hospital Association (AHA) supported the selection of Becerra for HHS secretary in their press releases, citing his commitment to the ACA. America’s Health Insurance Plans put out a statement saying it looks forward to working with Becerra but did not take a stance on him as the nominee.

The Infectious Diseases Society of America and the HIV Medicine Association strongly supported Biden’s selection of Walensky for CDC director, citing her deep commitment to public health and science in leading evidence-based and equitable responses to public health challenges, including the pandemic.

The AHA said Walensky is an exceptional choice to lead the CDC. A number of public health experts also celebrated her selection. Dr. Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, praised Walensky in an interview with Stat. Dr. Michael Mina, assistant professor of epidemiology at the Harvard T.H. Chan School of Public Health and a strong proponent of cheap, rapid antigen testing for SARS-CoV-2, took to Twitter, saying, “We are going to be in good hands! Science, Reason, Care embody one of our nation’s leading ID physicians – now becoming CDC director.”

HRI impact analysis

Becerra is expected to be a strong supporter of the ACA, after helping pass it as a senior House Democrat in 2010 and defending it as attorney general of California in the California v. Texas case, in which a group of Republican-led states argued that the $0 individual mandate penalty (reduced to $0 on Jan. 1, 2019, by the Tax Cuts and Jobs Act of 2017) meant that the mandate no longer amounted to a tax and that therefore the entire law is now unconstitutional. If the Supreme Court upholds the law again, expect to see action taken by both HHS and CMS to shore up the ACA. This could include reversing some policies put in place by the Trump administration, such as the expansion of short-term and association health plans.

If the ACA is struck down, millions of Americans will lose health insurance coverage. In 2017, HRI modeled that a full repeal of the ACA would lead to 32 million more uninsured Americans by 2025. A full repeal would negatively affect the entire healthcare industry, which has benefited from expanded health insurance coverage and benefits under the ACA. It could be especially disastrous for providers that are already struggling financially because of the pandemic.

HHS and the agencies under HHS will be limited in what they can do if the ACA is overturned. Action would be required by Congress to reinstate key provisions of the law like Medicaid expansion, coverage of preexisting conditions, and prohibition of lifetime or condition-specific caps on coverage.

As California attorney general, Becerra has opposed consolidation that could harm competition and lead to fewer choices or to price increases for consumers across a variety of industries, including healthcare. During his tenure, he sued a health system for anti-competitive practices and won.

Limiting market concentration across the healthcare system was one of Biden’s healthcare proposals during his campaign. While the Department of Justice and the Federal Trade Commission are responsible for reviewing proposed mergers and acquisitions, including vertical integration, Becerra could advise on transactions that could affect competition and in turn consumer choice or prices in the healthcare industry.

While this could be beneficial for payers who have seen higher prices from provider consolidation, at least in the short term, it could be yet another challenge for providers who may consider merging with or being acquired by another provider in order to survive the financial hit they have taken during the pandemic.

Under the Biden administration and led by Walensky, the CDC is expected to take on a larger, more public role in response to the COVID-19 pandemic. The agency will be responsible for guiding the distribution of and communication about the COVID-19 vaccine, which is expected to start rolling out to healthcare workers and long-term care residents later this month.

In a press release in mid-November, Walensky emphasized that the success of a COVID-19 vaccine will hinge on wide and speedy distribution and the public’s willingness to be vaccinated. Biden plans for the US to rejoin the World Health Organization (WHO), after President Donald Trump announced in May that the nation would withdraw from the agency. Walensky is a former adviser to the WHO and the Joint United Nations Programme on HIV/AIDS.

This could position her well to shepherd the transition of the US back into the WHO and allow for more collaboration between the CDC and other global partners around the COVID-19 pandemic. This likely will be welcomed by pharmaceutical and life sciences companies, many of which are based in the US but operate and sell globally, highlighting the importance of global alliances for the US. Providers, payers and employers likely will also welcome the global collaboration, if it could help the US to end the pandemic sooner.

Walensky and the CDC likely will also collaborate with the newly created COVID-19 equity task force, which will be led by Dr. Marcella Nunez-Smith, associate professor of medicine and epidemiology at Yale School of Medicine and founder of Yale’s Equity Research and Innovation Center. Nunez-Smith will advise Biden on government efforts to reduce racial disparities in the response to the pandemic, including the care and treatment received by people of color. The pandemic has disproportionately affected communities of color. Providers that have been working to reduce racial disparities in healthcare more broadly, beyond the pandemic, likely will welcome efforts by the federal government to help tackle these disparities.

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Trine K. Tsouderos

Business Insights, Sectors Leader and Health Research Institute Leader, PwC US

Tel: +1 (312) 241 3824

Ingrid Stiver

Senior Manager, Health Research Institute, PwC US

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