The Graham-Cassidy Bill
What is dead may never die
This late into 2017 and it seems the only sure things are hurricanes and healthcare repeal efforts. The latest is the brainchild of Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA). Materially, the bill differs only slightly from previous repeal and replace attempts, primarily by nominally devolving a great deal of federal spending to states. The biggest difference now is the timeframe. The Senate’s ability to use reconciliation has a quickly approaching expiration date. This countdown clock has pushed Republicans to run with whatever is on the table and willingly reshape the health care sector while blind.
Technically known as the Graham-Cassidy-Heller-Johnson proposal, the bill is a last-ditch effort to pass something akin to repeal and replace. The Senate parliamentarian ruled that any reconciliation attempts for fiscal year 2017 would expire on September 30th. They could pass repeal and replace using reconciliation for the 2018 budget, but Mitch McConnell has reserved this for their tax plan. As a result, the Senate can only pass an Obamacare repeal using just 50 votes if they get it done before September 30th. Republican leadership is hoping that this “use it or lose it” deadline will be enough pressure to move the Graham-Cassidy bill through the chamber.
Much of the Graham-Cassidy proposal works in the same way as previous attempts at ACA repeal and replace. It would:
- Repeal the Medicaid expansion
- Cut Medicaid by converting it to a block grant
- Add work requirement options to Medicaid
- Repeal the individual mandate
- Defund Planned Parenthood
- Encourage use of health savings accounts
- Repeal ACA prevention and public health funds
The biggest difference is in how the bill handles Medicaid and individual market subsidies. Graham-Cassidy converts the federal contribution to Medicaid into a per capita allotment in a block grant. The proposal also ends federal funding of marketplace premium and cost sharing subsidies, which get folded into these state block grants. This is combined with a broad waiver privilege for states. Through these waivers, states can opt out of covering the 10 essential health benefits enumerated by the ACA, as well as community rating. This gives states the ability to charge dramatically higher rates for people with pre-existing conditions, as well as opt-out of providing maternity, preventive, and mental health coverage. A CBO analysis of a similar amendment in House’s American Health Care Act suggests that 1/6th of the U.S. population would find themselves facing higher premiums for pre-existing conditions, while fully half of the U.S. would no longer be protected by the ACA’s essential health benefits.
Perhaps it’s worth noting that Bill Cassidy coined the “Kimmel test” after the late night host’s impassioned appeal to lawmakers. The test, he proposes, is that health legislation shouldn’t harm those who have pre-existing conditions. By any measure, the bill he helped author fails this test.
These block grants also represent a tremendous decrease in federal medical assistance, particularly in the form of Medicaid cuts. The degree of funding is calculated through a complex formula whose biggest impact is to redistribute money away from states that expanded Medicaid to those that did not.
The effect is a transfer of federal funds from many majority Democratic states to primarily Republican states (though Bill Cassidy’s Louisiana, which expanded Medicaid, would be disproportionately hurt as well). While “blue” states would be hurt hardest, all states would see an overall cut — estimated at $239 billion less from 2020-2026, and then $300 billion in 2027 alone and growing faster from then on as per capita allotments become more strict.
These block grants and cuts will force states to make an uncomfortable choice. With a limited pool of funds to cover Medicaid and individual market subsidies, do you shrink subsidies? Do you restrict the amount of services offered in Medicaid? Do you restrict the eligibility requirements of Medicaid so fewer people are covered? Combined with the repeal of the individual mandate and facing higher charges for re-existing conditions, Graham-Cassidy will likely shunt millions out of their insurance plan.
How likely is this proposal to pass? By most accounts, Republicans have 48 or 49 votes lined up, and only need to get to 50. The question becomes whether there are three Republican senators who can resist the pressure of one last attempt to repeal and replace. After almost eight years of promising to strike down the Affordable Care Act, this last push might just be enough.
Previous holdouts Dean Heller (R-NV) and Ron Johnson are co-sponsors of the bill. Senator John McCain (R-AZ) was the dramatic third “no” vote in the last push for repeal and replace. He stipulated he could not vote for a bill that didn’t go through regular order. In a shallow attempt to address Senator McCain’s demands, Republicans are scrambling to schedule a hearing before they vote. In an example of this challenge, next week the Committee on Homeland Security will hold a hearing on health care block grants. Despite having little to no health care jurisdiction, the committee will hold the hearing because Ron Johnson (R-WI) is a co-sponsor of the bill. Moving even further from regular order, the CBO won’t be able to issue a report on the effects of the Graham-Cassidy bill before the planned vote due to the accelerated schedule. However, Arizona’s governor has issued a statement in support of the Graham-Cassidy proposal, and it looks like Senator McCain may vote for it in spite of his calls for order.
Susan Collins (R-ME) and Lisa Murkowski (R-AK) are both potential “no” votes. Both senators owe little to party leadership and have resolutely voted down previous repeal plans. By defunding Planned Parenthood and imposing deep Medicaid cuts, Graham-Cassidy has nothing to offer either senator. The third “no” vote may be Rand Paul (R-KY), who has repeatedly vowed that he would settle for nothing less than full repeal.
One more potential swing vote recently cropped up in Louisiana as John Kennedy, the other senator from Bill Cassidy’s home state, announced he was undecided on the proposed bill. While Louisiana would face large cuts to funding under the proposal, the reason Kennedy is hesitant is that he thinks the bill gives too much latitude to states. Despite Republican rhetoric that devolving funding choices is a move towards state’s rights, Sen. Kennedy has argued that doing so might allow Democratic states to set up their own single-payer systems.
This bill will likely come down to just one vote. Republicans are rushing as fast as they can to jam the bill through Congress before the reconciliation window closes. If the mounting pressure is enough to sway holdouts, Americans would be looking at millions uninsured and higher premiums, without Congress having done their due diligence.
