Praise for Price might be short-lived

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John O'Connor
John O'Connor

As a general rule, businesses tend to be quite happy when elections put Republicans in charge of Congress and the White House.

That's because such outcomes almost always help free up the free market. In other words, they usually result in  fewer rules and regulations.

But senior living operators would be well advised to temper their giddiness this time, for two reasons. The first is Medicaid. The second, Medicare.

For although we may be on the cusp of a more business-friendly atmosphere in Washington, it's pretty clear that these programs are in for more than a haircut. And if your organization benefits directly or indirectly from either program, then you might want to start looking for a new revenue stream.

President-elect Donald Trump made dismantling the Affordable Care Act one of his central campaign promises. Tuesday, he took a major step toward making that happen. Trump announced that Rep. Tom Price (R-GA) will lead the Department of Health and Human Services.

Price, who currently serves as chairman of the House Budget Committee, has been a frequent critic of the ACA. He also previously has introduced legislation designed to gut it.

Price's appointment has received praise from several senior care organizations, who see a kindred spirit in Price. Given his orthopedic surgeon bonafides, he is likely to be more sensitive to the provider's perspective. But make no mistake: He will be anything but reluctant when it comes to reducing federal spending related to health services.

Medicaid likely will be the first target. Expect a hard push to make it a block grant program. States soon might end up with a maximum Medicaid funding allotment to play with, or a per-diem based amount. Either way, Medicaid's recent expansion appears to be doomed. The bottom line is that if you are counting on Medicaid funding to make ends meet, there's a good chance you'll have to count on less of it going forward.

It's a bit tougher to predict what will happen to Medicare, other than that it will be targeted for severe funding reductions. Price has been a staunch advocate of House Speaker Paul Ryan's plan to shift Medicare from a program with defined benefits into one based on “premium supports,” or vouchers. Where this gets tricky is that Trump has said he opposes vouchers, so we'll have to see how this particular dance plays out.

Clearly, a lot is at stake here. These two programs now provide coverage to more than 80 million people. So we're talking about imminent social engineering on a grand scale here. And at this point, it's all but impossible to know how the eggs going into the proverbial omelet will be broken.

What can be said with certainty is this: The people in charge want both programs to cut back on spending. In the grand scheme, that might be good for business. But it might not be so good for yours.

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