Assessing the potential impacts on U.S. health care in an election year

The 2024 U.S. presidential election campaign has been noteworthy for the lack of big‑ticket issues or policies from either leading candidate. Health care, for example, historically has been one of the hottest of all political potatoes during election years, given the scope for impactful change, but it has featured much less prominently in either candidate’s campaigning in this election cycle. This low‑key focus has been less disruptive for the health care sector than in recent election year campaigns, a fact duly reflected on the markets, with the sector posting positive returns in 2024 to date, albeit trailing the broader equity market’s rally.

By way of comparison, recent election years show the health care sector performing inconsistently, delivering an array of negative and positive annual returns in different election years (Fig. 1). This erratic track record has much to do with how central a topic health care has been in each election campaign and how significant the proposed changes to the U.S. health care system have been in the lead‑up to each election. One only needs to look back to the 2019–2020 campaign trail, when Democrat candidates proposed wholesale change in the form of “Medicare for All,” a single‑payer health system, to understand the pivotal role that health care can play in an election campaign.

With health care not being central to either candidate’s campaign talking points in 2024, the biggest impact on the sector is likely to come from which candidate ultimately wins and what this might mean for key health care issues. In this paper, we delve deeper into some of these contentious health care areas and consider the potential impacts depending upon who is elected come November.

U.S. managed care could see binary impacts

One of the most divisive—and decisive—areas of U.S. health care is the managed care industry, where ideology sees each candidate diametrically opposed in their view of, and approach to, providing health care to the American population.

Drilling down into the broad managed care landscape, we see four key topics that are likely to be central areas of focus for both candidates but that could see very different impacts, depending on who is ultimately elected the next U.S. president. We consider each of these below, from both sides of the political aisle.

Health care spending will continue to rise, but beneficiaries will differ

Whoever ultimately is elected the next U.S. president in November, we would expect health care spending to continue rising under either a Biden or a Trump administration. Even though both candidates have voiced a desire to bring down medical inflation, and specifically to rein in high drug prices, total spending will continue to be driven higher by patient demand, an aging population, and the cost of medical services and innovation. Our expectation, should President Biden win, is for total health care expenditure to increase, with public spending outpacing private. An early budgetary port of call for a new Biden administration is likely to be an extension to the expanded ACA subsidies. In contrast, if President Trump is reelected, we anticipate that he will move to reduce or eliminate the expanded federal subsidies, as well as reduce funding for several health programs, including Medicaid. While any attempts to overturn Obamacare fully are unlikely to succeed, weakening the ACA could ultimately see higher costs and reduced coverage for lower‑income Americans. In the event of a Trump victory, we would anticipate increased private health expenditure, at the expense of public programs, while pharmaceutical companies could also be better off, should a new Trump administration revoke Medicare’s power to negotiate drug prices directly.