Investing.com -- The upcoming US presidential election is set to influence the health care sector, with different implications depending on the outcome, according to analysts from Piper Sandler.
The firm believes that comprehensive health care reform is unlikely, regardless of who wins the White House, with both major parties showing little appetite for sweeping changes.
Piper Sandler analysts said a Republican victory could see the enhanced ACA subsidies, enacted in 2021 and renewed in the IRA, partially or fully rolled back.
This could lead to fewer insured individuals and increased bad debt issues for hospitals, said Piper Sandler.
Additionally, there could be "modest cuts to Medicaid" through the introduction of work requirements.
The GOP is also expected to maintain a friendlier regulatory environment for health care, which may result in a rollback of Biden’s laboratory-developed test rule and reinstatement of Trump’s breakthrough device rule.
In contrast, a Democratic sweep could result in Medicare Advantage (MA) cuts, which are more likely under Harris. While MA plans have broad support, regulatory and legislative risks for plan reimbursement rates could increase under a Democratic administration, said Piper Sandler.
“Medicare Advantage cuts are more likely with Harris in the White House,” said Piper Sandler.
The drug industry is also at risk if Democrats gain control, with the potential for more drugs being subjected to price controls and caps on out-of-pocket expenses extended to the private sector.
“While a Democratic sweep is unlikely, if that happens, Democrats would likely expand the price controls in the IRA,” they state.
Conversely, Trump “ Trump, but he won’t roll back the existing drug pricing provisions from the IRA,” adds the firm.
While no major health care reforms are expected, Piper Sandler believes certain bipartisan health care changes could still become law, including during a potential lame-duck session in December.