Like prior versions, the latest version of the bill from Senators Bill Cassidy and Lindsey Graham to repeal and replace the Affordable Care Act (ACA) would cut federal funding for health coverage for the large majority of states over the next decade (see Table 1). And the cuts would grow dramatically in 2027, when the bill’s temporary block grant (which would replace the ACA’s Medicaid expansion and marketplace subsidies) would expire and its Medicaid per capita cap cuts would become increasingly severe. We estimate that in 2027 alone, the bill would cut federal health care funding by $298 billion relative to current law (see Figure 1), with the cuts affecting all states.
In fact, starting in 2027, Cassidy-Graham would likely be even more damaging than a straight repeal-without-replace bill because it would add large cuts to the rest of Medicaid — on top of eliminating the Medicaid expansion — by imposing a per capita cap on the entire program. The Congressional Budget Office (CBO) has previously estimated that the repeal-without-replace approach would ultimately leave 32 million more people uninsured. Cassidy-Graham would presumably result in even deeper coverage losses than that in the second decade as the cuts due to the Medicaid per capita cap continue to deepen.
- Eliminate the ACA’s Medicaid expansion and ACA’s marketplace subsidies in 2020 and replace them with an inadequate block grant. Under our estimates, the block grant would provide about $239 billion less between 2020 and 2026 than projected federal spending for the Medicaid expansion and marketplace subsidies under current law, with the cut reaching $40 billion (16 percent) in 2026. The block grant would not adjust based on changes in states’ funding needs, and it could be spent on virtually any health care purpose, with no requirement to offer low- and moderate-income people coverage or financial assistance. And, as noted, the block grant would disappear altogether in 2027.
- The enormous cut in 2027 reflects two factors. First, the block grant would disappear in 2027. The bill’s sponsors have claimed that the rules that govern the budget reconciliation process, which allows the bill to pass the Senate with only 50 votes, necessitated that the proposed block grant be temporary. In reality, however, nothing in those rules prevents the bill from permanently funding its block grant. Furthermore, the expiration of the temporary block grant would create a funding cliff that Congress likely couldn’t afford to fill. Even if there were significant political support for extending the inadequate block grant in the future, budget rules would very likely require offsets for the hundreds of billions of dollars in increased federal spending needed for each additional year.
The administration’s chaotic reversals on Obamacare could deprive millions of coverage.
Meanwhile, the administration’s latest budget, released in mid-March, stands behind legislation known as “Graham-Cassidy,” which was pushed by Republicans in 2017 but never won enough support to be brought to a vote.
The Trojan horse of health care reform, the proposal provides for relatively small initial cuts in federal funding and then huge reductions starting in 2027.
According to a Brookings Institution report, Graham-Cassidy would cost 32 million Americans their health insurance by 2027, just as full repeal would. That’s Donald Trump’s idea of a “beautiful,” “terrific” and “unbelievable” health care plan.
.. The administration’s recent decision to submit a brief in a Texas case asking the court to declare all of Obamacare unconstitutional was well publicized.
Slipping by almost unnoticed was Mr. Trump’s instruction last June to the Justice Department, which was defending the A.C.A., to argue instead that certain key provisions — notably, the requirement that Americans with pre-existing conditions be treated equally — be declared unconstitutional.
A win by Mr. Trump in this case could mean that nearly 20 million Americans would lose insurance, according to the Urban Institute.
Ezra and Sarah parse through Graham-Cassidy, the latest Republican repeal bill.
White paper: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3025749
The GOP senators insisted that the tens of billions in cuts to federal health spending proposed in the bill would not result in coverage losses because, they said, the states would have more flexibility.
.. The GOP senators insisted that the tens of billions in cuts to federal health spending proposed in the bill would not result in coverage losses because, they said, the states would have more flexibility.
Sen. Pat Roberts (R-KS):
“If we do nothing, it has a tremendous impact on the 2018 elections”
.. as a general rule the states do things better than the federal government does [things]. And that is essentially what the bill is
.. I think the efficiencies that come with transferring the funding to the states can very well make up the difference between what the federal thing would be.
Sen. Ted Cruz (R-TX):
“It lets states innovate and adopt creative solutions”
the heart of the legislation takes the policymaking role of Washington and sends it to the states. It lets states innovate and adopt creative solutions to local problems, which vary state by state.
But it’s not just devolving power from the federal government to the state. It also involves a 16 percent cut in federal spending [upfront] and a 34 percent cut over the next 10 years.
.. Ted Cruz
CBO’s analysis throughout this process has been ridiculously slow, unreliable, and based on policy assumptions that are demonstrably false.
You really believe that cutting federal spending by 34 percent will not result in any other people losing their insurance?
What federal spending is cut?
Well, the Medicaid expansion would be sunset, for one, is my understanding.
The decrease in future rates of growth is not a cut. And it is only in the bizarre world of Washington that billions more money is characterized in the press as a cut rather than an increase, which is in fact what it is.
Sen. John Kennedy (R-LA)
.. I have sent four amendments to Lindsey [Graham] and Bill [Cassidy] that I think will strengthen the bill. The one I feel most strongly about is that I want the Medicaid work requirement — I don’t want it to be optional; I want it to be a requirement. Just like we did with welfare reform.
.. number two, I want to get us to give guardrails to the states to say, “You cannot use these moneys to set up a state-run single-payer system.” I don’t believe in it. I think it’s a mistake.
[Guardian reporter] Lauren Gambino
Do you think that kind of goes against the idea of states’ rights and being able to use this money [as the states want to]?
No, no. We have plenty of federal rules that apply to every state, but we still agree with states’ rights.
I think it spends scarce resources in a more rational manner. It will control costs. I like the idea that it encourages states to innovate.
How does it do that? Any of those things?
Well, you need to read the bill.
Well, you’re voting for it, right? So what is the explanation for how it does those things?
I am. Because it gives states added flexibility. Read the bill and you’ll understand.
The bill would cut federal funding to states by 34 percent over the next —
But it wouldn’t cut Alabama, though.
Well, do you think the other states should deal with —
Well, you see some of our states, four of our states, are getting a disproportionate amount of money from health care now. You know which ones.
.. Sen. Johnny Isakson (R-GA)
What is the policy explanation for the Graham-Cassidy health care bill?
Policy explanation? I’m not into policy, so I don’t really know. I’m into facts.
[In a follow-up interview hours later on Tuesday] You were joking earlier, but what is the health policy in the Graham-Cassidy proposal that you like?
More state innovation. More input from the states.
.. Johnny Isakson
The governors — I’m from a state that didn’t expand Medicaid, and the way we were going in health care looked like those states would actually be hurt worse than other states.
By going to block grants, back to the states, the control of money stays with the states, and you have less [un]predictability and external deviation in terms of funding.
.. Jeff Stein
So just a follow-up on that. It’s one thing to say the bill gives the states power — that’s one thing.
But it doesn’t just do that. It also cuts the money they have — some estimates say around 16 percent of federal funding.
I’m not going to confirm that statement one way or another. I don’t know what the numbers are going to end up looking like.
Right, but if it does cut federal spending overall, would you support it?
You know, those are dangerous questions. I’m waiting until I see the totality of the legislation to say whether I support the whole thing or not, anyway.
I’m not a no, but I’m not a yes either — and I’m waiting for my governor to respond to me with their input as well. It’s really key what they’re doing.
.. Sen. John Barrasso (R-WY):
“The governors who decided to expand [Medicaid] knew that they were going to lose federal funding”
I want to ask, in a big-picture way: What is the policy explanation for how this bill makes people’s lives better?
It gets the money out of Washington, lets people at home make the decision, and gets state legislatures involved, and governors involved. It moves money out of Washington. It’s away from socialism.
CBPP says it will also reduce federal health spending on Medicaid and the exchanges by about  percent.
I’d love to reduce federal spending on health insurance.
Right, but so it’s not just about moving power to the states — it’s also about cutting funding.
It’s about moving power to the states, where money can be spent much more effectively.
How does it do that?
Well, you have to read the formula and read the bill, and it will tell you how it moves money to the states and how much they get and how much they don’t get. …
There’s a concern from Republican governors who have come out and said, “This is too dramatic a cut in spending; we won’t have enough money to insure everyone.”
You have to interview them on that.
Do you think they’re wrong?
Well, it depends on if they’re states that expanded Medicaid or not. …
In the Medicaid expansion states, they still have a lot of people who rely on Medicaid expansion for health insurance.
I opposed Medicaid expansion. I think the Supreme Court got it wrong [when it ruled in 2012 that Congress did have the constitutional authority to implement most of Obamacare].
The governors who decided to expand [Medicaid] knew that they were going to lose federal funding over time, and they’re objecting to that — but they knew it. You could say, “Some of them didn’t understand it, and so-and-so wasn’t there, and he wasn’t governor yet,” but they understood that this would be part of the process. So if they used the money poorly —
And my concern with Medicaid is that the people who Medicaid was designed for originally have been cut out of the process, because they’re still on the waiting list to get on Medicaid. I don’t know how much you understand about Medicaid, but this whole expansion of Medicaid went for healthy, working-age individuals — it did not go for the people who [Medicaid] was designed for, which was low-income women, children, and the disabled.
.. Sen. Chuck Grassley (R-IA):
“This is the last attempt to do what we promised in the election”
.. Chuck Grassley
Let me give you a political answer, and then I’ll give you a substance answer.
The political answer is that Republicans have promised for seven years that we were going to correct all the things that were wrong with Obamacare, and we failed the first eight months. This is the last attempt to do what we promised in the election.
The substance answer is that Obamacare starts with the principle that all knowledge about health care, and all decisions on health care, ought to rest in Washington, DC. The complete opposite of that is Graham-Cassidy, that Washington doesn’t know best and we’ll let each of the 50 states [decide what’s best].