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Donald Trump will take over the presidency again in January. There will be many implications for home-based care providers, and details from Trump’s first presidency will help project those.
In the weeks leading up to the Nov. 5 election, Trump and Kamala Harris battled over home-based care. Specifically, Harris suggested a personal home care benefit under Medicare, while Trump’s campaign focused on economic points that it claimed would make home care more affordable, expanded benefits under Medicare Advantage (MA) and better telehealth access.
But Medicare Advantage (MA) and telehealth are far from the most important changes that home-based care providers could see under the next Trump administration.
A lesser focus on antitrust initiatives should be expected, clearing the way for larger deals like UnitedHealth Group’s (NYSE: UNH) takeover of Amedisys Inc. (Nasdaq: AMED). Home health reimbursement may even be affected, as well as home care reimbursement under Medicaid.
In the months leading up to it, home-based care providers often described this election as “pivotal.” Some will like the changes that take place over the next four years, and others won’t. But all of those projected changes are worth taking a look at.
“A lot can happen based on what happens in this election, in terms of the future of not only home- and community-based services, but also Medicare and anything health care oriented,” Dave Totaro, the chief government affairs officer at Bayada Home Health Care, told me on stage at the FUTURE conference earlier this year.
In this week’s exclusive, members-only HHCN+ Update, I forecast what Trump’s win may mean for home health and home care providers across the country.
Medicare-certified home health care
It’s hard to pinpoint how one government agency will act just because there is a new president in place. The president matters, but so does the president’s appointee. The next administrator of the Centers for Medicare & Medicaid Services (CMS) will be an important figure in the eyes of home health providers.
There was a lot of noise around the year 2020. COVID-19 hit, the president changed. In home health care, the Patient-Driven Groupings Model (PDGM) was implemented.
But very basically and broadly, CMS under Trump – and former administrator Seema Verma – was kinder to the home health industry. Since President Biden took office, CMS has implemented three straight permanent cuts to payment, and has promised more of the same in the future.
Both Democrats and Republicans generally support the home health benefit. That is evident in the sponsorship of the Preserving Access to Home Health Act, and was also evident in a Senate Finance Committee’s Subcommittee on Health Care hearing last year, in which both parties defended home health providers and questioned CMS’ handling of home health payment.
Providers had their gripes with Seema Verma’s CMS, as they do with Chiquita Brooks-LaSure’s. But undeniably, they stood on firmer footing during Verma’s reign. Over the last few years, payment in traditional Medicare has decreased, as has home health access.
Traditional Medicare has been the trusted backstop that providers have historically relied on. Though providers and advocates disagree with cuts and the methodology behind them, traditional Medicare is definitively a good payer source.
Medicare Advantage (MA), however, has not been a good payer for home health services. MA payment for home health services often fails to even cover the cost of care. But providers have been able to care for MA patients based on the payment they get for traditional Medicare patients. That’s no longer the case.
The Trump administration is likely to be more lenient and supportive of the MA companies overall, too. Those companies generally draw the ire of home health agencies, both for their payment and practices around claim denials and prior authorization. But a more favorable MA environment doesn’t necessarily spell trouble for providers.
“We see a Trump White House reading most positive for MA-levered stocks (ALHC, HUM, UNH) and prospects for M&A,” an analyst note from the investment banking company Stephens read. “Given antipathy directed towards Home Health from Biden’s CMS, we also see reason for optimism on Medicare home health reimbursement post CY 2025.”
Medicaid HCBS
Kamala Harris falling short in the election means there will not be a home care benefit under Medicare in the near-term future. For now, private pay and Medicaid will remain the two primary payers for home care services.
Under Trump, home- and community-based services (HCBS) face a less clear future. HCBS rates and regulations already vary widely by state. The looming 80-20 provision, however – which is a part of the Medicaid Access Rule – is far less likely to continue on track under Trump’s watch.
That much is good news for home care providers, though states could implement similar measures on their own.
“A Red Senate (and possibly Red House) fosters an optimistic backdrop for legislation to debunk certain regulatory actions pursued by Biden’s CMS, including SNF Minimum Staffing Mandate (ENSG, PACS) and the PCS 80/20 Rule (ADUS, MODV),” the Stephens note continued.
At the same time, Medicaid initiatives broadly will likely be supported less under Trump.
“The broad trend across both blue and red states has been toward increased coverage and increased focus on SDOH and other initiatives to improve access and lower total cost of care,” Rebecca Springer, lead health care analyst at Pitchbook, wrote in a recent report. “A Trump administration rollback of Medicaid funding could lead to slower membership growth and more difficulty selling point solutions to Medicaid managed care organizations, while a Harris administration would provide a more conducive environment for company building.”
Pitchbook and Springer also noted that Trump “broadly supports shrinking the scope of Medicaid.” In his first term, Trump proposed a budget that would have reduced federal Medicaid spending by $1 trillion over a decade.
Home care providers have already begun to flock to states that have more favorable HCBS and Medicaid environments, however.
The disparity in HCBS environments could lead to significant care access gaps, however.
Home-based care M&A
The Biden administration has been very active in blocking or scrutinizing deals it deems potentially anticompetitive.
One such deal is UnitedHealth Group’s takeover of Amedisys for $3.3 billion. UnitedHealth Group already owns LHC Group, and will own close to 10% of the home health market if it takes over Amedisys as well. LHC Group operates under UnitedHealth Group’s health care provider services arm, Optum.
UnitedHealth Group first agreed to acquire Amedisys in June of 2023. Since then, the DOJ and certain states have asked for further information on the deal, and have also considered blocking it.
DOJ officials were reportedly set to have a “last-rites” meeting with Amedisys and UnitedHealth Group leaders over the deal last week, but that was delayed until after the election. Now that a new DOJ regime could be ushered in, it’s likely the deal will go through.
It’s not just that a traditionally fragmented home health industry would have a new behemoth on its hands in Optum. Skeptics have also raised alarm around UnitedHealth Group being the largest MA payer through UnitedHealthcare, and that potentially causing anticompetitive practices in the markets where LHC Group and Amedisys operate.
Amedisys has already agreed to divest locations to VitalCaring in order to finalize its deal with UnitedHealth Group.
But past Amedisys, a new administration could also clear the path for further large-scale M&A in home health care. Enhabit Inc. (NYSE: EHAB), for instance – which conducted a strategic review earlier this year, but ultimately did not sell – could be an attractive target to Humana Inc. (NYSE: HUM) or UnitedHealth Group with less stringent regulation.
Humana – which is the second largest MA payer – also already has its own home health asset in CenterWell Home Health.
A better MA environment and less antitrust focus could allow these payers to continue consolidating the home health industry.
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