Election First Take Analysis

Bill Finerfrock, Executive Director


Election First Take Analysis

The following is our quick analysis of the election for your reading pleasure. NARHC will also be creating a more RHC-centric analysis and sending that out sometime next week via List Serve.

Two days ago, Republican candidate Donald Trump was elected as the 45th President of the United States. Trump defeated his Democratic opponent, Hillary Clinton, despite an overwhelming sense by almost everyone going into Election Day that Clinton would win.

Trump’s 276 electoral votes, which is only six more than are required to win the election, does not speak for the decisiveness of his victory. Those who paid close attention to polling data and projections on reputable websites, such as 538 and Real Clear Politics, expected a very close race with Clinton edging out a win. Not only did Trump outperform projections in most of the up for grab “swing” states such as Pennsylvania, North Carolina and Florida, he was also able to win several states that historically vote Democrat that he was not expected to have a chance of winning. The most notable of these states include Wisconsin and Michigan.

Most pundits and pollsters dismissed the possibility of a “Trump effect” in which Trump outperformed polls due to the people being surveyed not wanting to go on record that they were supporting Trump. The Trump effect played a significant role in the primary elections. Trump had also narrowed a lead that Clinton held over the past two weeks. In fact, Trump was polling within the margin of error in many of the states he won.

This was, by any measure, a transformational election. It was an “insiders” vs. “outsiders” election more than a “liberals” v. “conservative” election at the Presidential level. It was also an economic election. Places like Pennsylvania, Ohio, Wisconsin and Michigan voted red. While the national economic numbers are improving, general confidence in the economy has yet to make a full recovery after the great recession. Many Americans felt that they have been passed over. This was middle class America’s “I will not be ignored” moment.

Looking down the ticket, the House of Representatives will remain in Republican control. This was always expected. The Senate will also remain in Republican control despite a much less certain outlook going into Election Day. However, Republicans will not have a “super majority” of 60 seats needed to override a Senate filibuster. The results of the House and Senate elections will be covered in greater detail later in this document.

But now the work begins.

It is worth noting that this will be the first time the GOP has controlled the House, Senate and White House since 1928 so this is something none of us have ever experienced. The Republicans will also now be able to nominate a ninth Supreme Court Justice, which could swing the political balance of the court towards conservative ideology.

The GOP victories down ticket (House and Senate) suggest that there are opportunities to get things done in the legislative arena that may not have been possible under divided government. We still have the filibuster in the Senate but it is possible that we will see, particularly in the first 100 days, legislation enacted that makes some significant changes in policy. The GOP had the odds against them relative to the number of seats they were defending relative to the Democrats. But those tables are turned in 2018 when more than 20 Democratic Senate seats will be up and only a handful of GOP seats. Trump is a negotiator, not an ideologue, so he will likely be open to deals that wouldn’t be possible under a more ideologically driven politician. Democrats up for re-election in 2018 may be inclined to “work with” the new President, particularly if they are in a “red” state.

With regards to health policy, this may result in some down-the-road changes to MACRA but the core will remain. MACRA enjoyed strong bi-partisan support and will likely continue to enjoy bi-partisan support. However, changes could be made that might have been unrealistic just a few weeks ago.

Additionally, key provisions of the Affordable Care Act (ACA) are in jeopardy (individual mandate, employer mandate). It may also accelerate Health Plan departure from the ACA Exchanges because they want more in the way of protections from risk and those are not likely to occur under a GOP Congress. Lack of a filibuster-proof Senate means a full repeal of the ACA is unlikely but dramatic changes will likely occur.

Trump and the GOP Congress can, despite the filibuster, use Budget Reconciliation – the same legislative process President Obama used to pass some of the key provisions of the ACA – to repeal and or replace key provisions of the ACA with only a simple majority. Some provisions of the ACA, such as protections for patients with preexisting conditions and allowing consumers to remain on their parent’s insurance plan until they are 26, remain popular and could exist in some form under a Republican alternative.

Reconciliation could also be the likely process for enacting a tax reform