Latest Version of Cassidy-Graham Still Has Damaging Cuts to Health Care Funding That Grow Dramatically in 2027

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.[1]  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.[3]

Trump’s Attacks on Health Care Will Backfire

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 reportGraham-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 insuranceaccording to the Urban Institute.

GOP senators are rushing to pass Graham-Cassidy. We asked 9 to explain what it does.

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

Jim Inhofe

..  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.

Jeff Stein

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.

Jeff Stein

You really believe that cutting federal spending by 34 percent will not result in any other people losing their insurance?

Ted Cruz

What federal spending is cut?

Jeff Stein

Well, the Medicaid expansion would be sunset, for one, is my understanding.

Ted Cruz

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]?

John Kennedy

No, no. We have plenty of federal rules that apply to every state, but we still agree with states’ rights.

John Kennedy

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.

Jeff Stein

How does it do that? Any of those things?

John Kennedy

Well, you need to read the bill.

Jeff Stein

Well, you’re voting for it, right? So what is the explanation for how it does those things?

John Kennedy

I am. Because it gives states added flexibility. Read the bill and you’ll understand.

 ..

Jeff Stein

The bill would cut federal funding to states by 34 percent over the next —

Richard Shelby

But it wouldn’t cut Alabama, though.

Jeff Stein

Well, do you think the other states should deal with —

Richard Shelby

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)

Jeff Stein

What is the policy explanation for the Graham-Cassidy health care bill?

Johnny Isakson

Policy explanation? I’m not into policy, so I don’t really know. I’m into facts.

Jeff Stein

[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?

Johnny Isakson

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.

Johnny Isakson

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.

Jeff Stein

Right, but if it does cut federal spending overall, would you support it?

Johnny Isakson

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”

..

Jeff Stein

I want to ask, in a big-picture way: What is the policy explanation for how this bill makes people’s lives better?

John Barrasso

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.

Jeff Stein

CBPP says it will also reduce federal health spending on Medicaid and the exchanges by about [20] percent.

John Barrasso

I’d love to reduce federal spending on health insurance.

Jeff Stein

Right, but so it’s not just about moving power to the states — it’s also about cutting funding.

John Barrasso

It’s about moving power to the states, where money can be spent much more effectively.

Jeff Stein

How does it do that?

John Barrasso

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. …

Jeff Stein

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.”

John Barrasso

You have to interview them on that.

Jeff Stein

Do you think they’re wrong?

John Barrasso

Well, it depends on if they’re states that expanded Medicaid or not. …

Jeff Stein

In the Medicaid expansion states, they still have a lot of people who rely on Medicaid expansion for health insurance.

John Barrasso

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].

Cruelty, Incompetence and Lies

Graham-Cassidy, the health bill the Senate may vote on next week, is stunningly cruel. It’s also incompetently drafted: The bill’s sponsors clearly had no idea what they were doing when they put it together. Furthermore, their efforts to sell the bill involve obvious, blatant lies.

The Affordable Care Act, which has reduced the percentage of Americans without health insurance to a record low, created a three-legged stool:

  1. regulations that prevent insurers from discriminating against people with pre-existing conditions,
  2. a requirement that individuals have adequate insurance (and thus pay into the system while healthy)
  3. and subsidies to make that insurance affordable. For the lowest-income families, insurance is provided directly by Medicaid.

Graham-Cassidy saws off all three legs of that stool.

  1. it eliminates the individual mandate.
  2. sharply reduces funding relative to current law, and especially penalizes states that have done a good job of reducing the number of uninsured.
  3. And it effectively eliminates protection for Americans with pre-existing conditions.

Did Graham-Cassidy’s sponsors know what they were doing when putting this bill together? Almost surely not, or they wouldn’t have produced something that everyone, and I mean everyone, who knows anything about health care warns would cause chaos.

Republicans are trying to ram the bill through before the Congressional Budget Office has time to analyze it — an attempt that is in itself a violation of all previous norms, and amounts to an admission that the bill can’t bear scrutiny.

.. Lindsey Graham, Bill Cassidy, and the bill’s other sponsors have responded to these critiques the old-fashioned way — with lies.

.. Cassidy has also circulated a spreadsheet that purports to show most states actually getting increased funding under his bill. But the spreadsheet doesn’t compare funding with current law, which is the relevant question.

.. That’s actually a well-known dodge, one that Republicans have been using since Newt Gingrich tried to gut Medicare in the 1990s. As everyone in Congress — even Cassidy — surely knows, such comparisons drastically understate the real size of cuts, since under current law spending is expected to rise with inflation and population growth.

.. Republicans are desperate to destroy President Barack Obama’s legacy in any way possible, no matter how many American lives they ruin in the process.

.. most Republican legislators neither know nor care about policy substance. This is especially true on health care, where they never tried to understand why Obamacare looks the way it does, or how to devise a nonvicious alternative.

.. the evasions and lies we’re seeing on this bill have been standard G.O.P. operating procedure for years. The trick of converting federal programs into block grants, then pretending that this wouldn’t mean savage cuts, was central to every one of Paul Ryan’s much-hyped budgets.

.. Graham-Cassidy isn’t an aberration; it’s more like the distilled essence of everything wrong with modern Republicans.

.. But even if the handful of Republican senators who retain some conscience block it — we’re looking at you, John McCain — the underlying sickness of the G.O.P. will remain.