2020 Election with Avalere: What Are the Differences in Healthcare Platforms?

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Tune into our second episode of the Avalere Health Essential Voice: 2020 Election series. In this segment, experts from the policy and vaccines teams discuss the healthcare themes heard at the recent political conventions, and differences we can expect to see in the candidates’ healthcare platforms.
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Matt Kazan , Managing Director, Policy

Matt Kazan advises health plans, life sciences clients, and patient organizations as they navigate the policy landscape, focusing on Medicare Part D and Medicare Advantage, and implementation of the Inflation Reduction Act.

Richard Hughes IV , Managing Director

Richard Hughes IV leads Avalere’s vaccines team, which supports clients with vaccine policy, market access and evidence strategies.

Chris Sloan , Principal, Policy

Chris Sloan advises a number of clients, including pharmaceutical manufacturers, health plans, providers, and patient groups on key policy issues facing the healthcare industry.

This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our Insight Subscription page.


Matt: Hello, and welcome to another episode in the Avalere Health Essential Voice series focused on the 2020 election. In this series, we will be covering the current state of play of the 2020 election and the role of healthcare within it.

My name is Matt Kazan, and I’m a principal on the policy team at Avalere. I’m joined today by Richard Hughes, who leads the vaccines team and is an expert in public health, prevention, and vaccines policy. I’m also joined by Chris Sloan, an associate principal on the policy team. He is an expert on commercial insurance coverage, the Affordable Care Act (ACA), and the intersection between the economy and healthcare coverage.

In today’s episode, we’ll be discussing the overarching themes from the Democratic and Republican National Conventions.

The COVID-19 pandemic was discussed during both conventions, but how the pandemic was framed was very different. Looking at how voters in each party view the trajectory of the pandemic may explain some of the differences in what we heard. According to a Pew poll conducted at the end of June, 76% of Democrats felt the worst of the pandemic was still to come, whereas 61% of Republicans felt that the worst of the pandemic was behind us.

Richard, fast forward two months to today. We saw the total number of cases increase in July and then begin to decline in August. What is the trajectory of this pandemic for the remainder of the year and into next year?

Richard: That’s a great question. I think it all hinges on efforts to socially distance, wear masks, and whether we have a vaccine. Right now, we don’t. I anticipate that the public will not have access to a vaccine until the end of 2021, early 2022. When the first vaccines come out, only healthcare workers and essential workers will have access. For the time being, all we can do to prevent the spread of coronavirus is socially distance and wear masks. As a country, we’ve really struggled with the consistent use of those techniques, so it really does come down to that.

Matt: Chris, before I get your take on how the next several months play out, I want to dive into the impact of the pandemic on health insurance coverage because this came up a lot at the Democratic National Convention (DNC). What are the big differences in the coverage landscape, if you were to compare February 2020 to today?

Chris: Healthcare in the United States is predominantly tied to employment, so when you have a big recession, a lot of people lose insurance. Compared to February, we’re looking at a couple of things. One, we’re looking at fewer people with employer-sponsored insurance. Two, we’re looking at those people going into three main buckets:

The first is Medicaid. We’re starting to see double-digit percentage increase in state Medicaid programs.

The second is the individual market. We’re seeing people move into the exchanges, special enrollment periods, things like that.

Three, we’re seeing a boost in the uninsured, which had been going up in 2018, 2019, and into 2020, but slowly, with population. We’re expecting to see many more people go uninsured in 2020 because they’ve lost their job-based coverage. They’re likely going to stay uninsured, either because they can’t find new forms of coverage, or decide not to.

Compared with where we were in February, we’re looking at a new world in terms of health insurance coverage in the US. From 2014 onwards, we’d been seeing improvements, a declining or stable uninsured rate. Higher numbers of uninsured, more people on Medicaid, more people on the exchanges will have a lot of policy implications heading into 2021.

Matt: Yeah, absolutely. It’s a big change. There are many ways the economy and labor market could evolve over the next 18 to 24 months, which includes, as you said, the insurance market. In trying to understand how the coverage landscape is going to change over the next few years, Chris, what are the main factors that you look at, putting aside the availability of a vaccine for a moment?

Chris: Yeah, we can call this this segment Economics with Avalere because it really is economic-driven. You’re looking at three main pieces that are driving how the coverage landscape is going to evolve over the next two years.

One is just pure policy. What happens to unemployment insurance? What happens to the additional dollar amounts, which are currently at $300-$400 in some states under the President’s executive order? Does that continue? We have a lot of base unemployment insurance running out across the country at the end of the year. The drops in income are going to be substantial for some people, and that’s going to mean fewer people qualify for the exchanges. Maybe more of them go into Medicaid or go uninsured, even without additional job loss. Economic support for more policy is really big.

Another piece is permanent job loss. We know the airlines are looking at layoffs in October if they don’t get more bailout funds. There are other industries in the same boat, such as local governments, that are different from what we’ve seen so far. We’ve seen a lot of job loss in retail, hospitality and tourism, but less in industries that have high offer rates of insurance like unionized jobs and government jobs. As this drags on, the types of job loss might change and that’s going to have additional effects on loss of coverage, particularly for layoffs that come with a year of health insurance. You can have people losing their health insurance for the first time at the end of 2021, so it’s not as if we’ve gone through the worst already and everything is improving. There’s going to be more permanent job loss in the coming months.

The last thing is just demand. We’re seeing economic improvement and a decline in the uninsured rate over the last few months. A lot of that is due to economies reopening. People can go back to work. Stores are open again. The restrictions are fewer, but to get beyond high single-digit unemployment, demand is going to have to recover, too. It’s not just the effects of reopening. A lot of uncertainty lies around things like when the vaccine comes out, which Richard will talk about, or how fast that demand bounces back as we potentially go through a second wave in the fall or winter. What happens on the policy side into 2021 is probably the most uncertain piece of this, and a lot of these issues we’re talking about today are going to be driving a trickle-down effect on demand.

Matt: Very helpful. I think you launched an Avalere podcast today, so sign me up for that.

Richard, let’s dive into the COVID vaccine, which you touched on earlier. We’ve heard both the Vice President and the President say during the Republican National Convention (RNC) that they think a vaccine will be available by the end of the year. Is that the consensus, and what would need to happen for that to occur?

And then also dive into the difference between FDA approval and authorization of a vaccine versus the availability of that vaccine to the general public. What are the key factors folks need to look at there?

Richard: Yeah, I think that some of the rhetoric is a bit misleading. To say that a vaccine will be available by the end of the year does not mean that all 300 million plus Americans are going to have access to that vaccine.

What we know is that a few vaccine candidates will likely move forward with an Emergency Use Authorization by the end of the year, assuming that they meet the criteria that the FDA sets forth, balancing the risk and benefits of having an unlicensed vaccine on the market, made available to certain priority groups. Again, that would be essential workers, healthcare workers. Then as we move into next year, additional emergency use authorizations will make more doses available. In the next year, we’ll start to see official licensure of some of these candidates, and as we move through 2021 and additional doses become available, we’ll see more Americans have access to vaccines.

Matt: Great, thank you. So, in thinking about what Richard just said, how does the availability of a vaccine, initially and to the general public, impact the labor market, insurance coverage, and some of the numbers that you’re diving into now?

Chris: It’s really that last piece I mentioned—the demand side of things. When we have a vaccine, it’s going to have an effect on bringing back demand, allowing people to travel again while these industries pick themselves up off the mat. It’s not going to be immediate. Some of that is beyond the vaccine. That permanent job destruction is going to take a while to recover, but it’s a big factor in getting demand and subsequent economic growth to a place where we can start getting people back to work. That all leads into coverage.

I think it’s a mistake to look at the unemployment rate and say, “Oh, if that goes down, people getting job-based health insurance will go up at the same speed.” It won’t. People are getting fewer hours. Maybe they’re finding a job, but it has less generous benefits. This is typical in recessions. The exact same jobs don’t just come back. You end up with different jobs and it takes a while for wages and benefits to catch up.

A vaccine is a big part of that. I think we can look at the vaccine both as a public health benefit to stop the spread of COVID, but also as a requirement to get the economy back humming to the extent where people get job-based health insurance back and move out of the ranks of the uninsured or Medicaid or, in some cases, the exchanges.

Matt: It’s really fascinating how everything is connected as we think about the future. Richard, let’s pull back from the availability of the vaccine to the larger public health response to COVID. Avalere does a lot of scenario planning based on how the election may turn out. We look at what policies Congress can enact and what type of regulations a potential administration would advance. When it comes to COVID response, are there different scenarios that folks should think about in how the government will respond to COVID in 2021? What are the major ways the public health response could change between a second term of President Trump versus a potential Biden administration?

Richard: I think we could see a big change in how these respective administrations would handle a public health response. The current administration has leaned heavily on National Institutes of Health. Great institution, but it’s very unusual to lean on in terms of a public health response. The administration has also relied on a military-style approach. We saw the military deployed to build field hospitals and deploy PPE. We’ll likely see some involvement of the Department of Defense (DOD) in deployment of a vaccine. Operation Warp Speed is a collaboration between DOD and the Biomedical Advanced Research and Development Authority (BARDA) and other public health agencies.

In a Biden administration, I think we would likely see a restoration of the Centers for Disease Control and Prevention (CDC) as the lead agency in the public health response. Agencies like BARDA would continue to play a lead role, but in less of a military-style approach.

Matt: Interesting. So, before we get to 2021, the election must play out. Chris, according to the Kaiser Family Foundation, in July, the percent of Americans who viewed the ACA unfavorably was at a 10-year low. That might explain why we didn’t hear much about the ACA explicitly at the RNC. What role do you think the ACA plays in the next two months of the campaign?

Chris: I’d say in terms of a political lens, very little, if at all. We didn’t hear it at the RNC. It underpins a lot of Biden’s policy proposals, but they are building on the ACA or adding new things like a public option or Medicare expansion. So within the policy debate, I wouldn’t expect to hear a ton about the ACA aside from some hits from the Biden campaign or the Trump campaign about supporting the lawsuit to overturn the ACA and declare it unconstitutional.

In reality, the ACA is playing a big role in where people are shifting. They’re going into Medicaid expansion, into the exchanges, and the subsidies available there are due to the ACA. From a public optics perspective, I wouldn’t expect to hear it thrown around a lot. It’s more so, “What is helping Americans not lose their coverage? What is helping the coverage lost be a lot less than it would have been in 2009 or 2008?” That’s the ACA, and it’s really propping up health insurance for a lot of Americans during the pandemic and widespread job loss.

Matt: It’s quite a shift from previous election cycles. Thank you, Chris and Richard. Your insights are very helpful as we head toward election day, and thank you all for tuning in to Avalere Health Essential Voice. Please stay tuned for more episodes in our 2020 Election Series. If you’d like to learn more, please visit Avalere.com/2020-election. Thank you very much.


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