The likely reality of a divided federal government

Our advice to healthcare organizations trying to plan around the upcoming election is to focus on state capitals and not expect too much from Washington, D.C. This is simply an acknowledgement of the implications of a likely divided government at the federal level, and typically united (trifecta) governments in most U.S. states.

Former President Donald Trump and Vice President Kamala Harris have both largely run turn out the base campaigns. This is not a criticism of either. Indeed, given how divided the country is, and how few voters are undecided at this point, it's probably the smart play: Spend your money on getting the people who support you out of bed and to the polls, rather than trying to persuade a handful of undecideds with generally very negative views of both candidates.

This has also been a surprisingly policy-free election, particularly with regards to healthcare. Aside from abortion, the candidates have spent little time on the topic, and healthcare is far down on the priority list of 2024 voters. Whichever candidate ends up in the White House, they will likely do so with little ability to reach across the aisle (anyone imaging Trump and Senate Majority Leader Chuck Schumer (D) going out for a beer?) and absolutely no mandate from the public on any major healthcare issue (abortion possibly excepted).

With eight Democratic seats considered toss-ups in the Senate and no Republican seats in that category, most insiders are betting on a Republican Senate with a slim majority. Harris clearly has better coattails than President Joe Biden, but Democrats would require quite an election night to prevail in states like Ohio, Montana, Texas, and Florida (West Virginia is already abandoned).

Indeed, in many polls, Americans are showing an increased appetite this year for ticket splitting — with high unfavorables for both candidates, many voters may want the divided government they are likely to get. The House is considered a true toss-up, with a slight edge to the Democrats. The only certainty in the House being whomever wins having a slim majority — again, divided government.

As if this weren't enough to lower expectations of Washington, the Supreme Court's ruling overturning the Chevron precedent will provide a significant chilling effect on the use of executive orders by the next president.

President Barack Obama, frustrated by the Republican legislature at the time, once famously threatened "I have a pen, and I have a phone!" It would be a hollow threat in the wake of Chevron's overturning. Making significant changes to the American healthcare system (via the federal bureaucracy) by creating a tenuous connection to existing legislation will be much more difficult. This difficulty was furthered by extensions to the statute of limitations for challenging agency actions in the subsequent Corner Post ruling — which expanded the statute of limitations for when a plaintiff can challenge agency action — and the Loper Bright ruling, which eliminated Chevron deference.

There is of course one obvious exception to the "don't expect much from D.C." insight: Medicare Advantage rates. However, these may be subject to challenges in the wake of Chevron — indeed, changes to the Star Ratings methodology were already successfully challenged.

There are also a few opportunities for true bipartisanship even in this charged political climate: scrutinizing consolidation, price transparency, prescription drug prices, and appropriate payments.

Where healthcare stakeholders should focus their efforts

Healthcare organizations should focus on state capitals that are legislatively active in  truly impactful topic areas: prior authorization (10 states have already passed reforms), coverage and benefits (for example, mental health parity), abortion access (ironically, abortions have increased since Roe v. Wade was overturned ), and cost control (California in April passed a price cap).

It's a volatile time and emotions are strained. Our healthcare clients should expect limited input from Washington in an era of divided government, and calmly focus most of their advocacy and analysis on their respective state houses. (Brenan, Gallup, 10/9; Daniels, Politico, 10/5; McAuliff, Modern Healthcare, 8/24)

Advisory Board's election-related resources

1. The state of the industry: What healthcare leaders need to know for 2025

Join us on Dec. 17 for a post-election update. Find out what healthcare leaders should know about the biggest trends in the industry — from the shifts upending care utilization to the impact of the new administration on health policy. 

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2. Listen to Radio Advisory, a podcast for healthcare leaders

Radio Advisory is your weekly download on how to untangle the industry's most pressing challenges to help leaders like you make the best business decisions for your organization. 

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