Senate Republicans are again in the midst of an effort to repeal and replace the Affordable Care Act (ACA) as they consider legislation put forth by Senators Lindsay Graham (R-SC) and Bill Cassidy (R-LA). The “Graham-Cassidy” bill includes the following key provisions:
- By 2020, the bill would repeal the Medicaid expansion and the ACA’s premium tax credits and cost-sharing reduction subsidies that help lower-income and middle class Americans purchase health insurance coverage. The bill would take the funding that would have been used for ACA insurance subsidies and Medicaid expansion and, using a complex formula, distributes it to the states in the form of a block grant. States would use the block grant to establish and implement their own health programs within two years. However, this block grant funding would end after 2026.
- The bill would make deep cuts to Medicaid by converting the traditional Medicaid program’s federal financing into a per capita cap model, in which states would receive a set amount of federal funding per Medicaid beneficiary.
- States would be allowed to obtain waivers that would permit them to eliminate ACA insurance regulations that require insurers to cover a set of essential health benefits and that prohibit them from charging people with pre-existing conditions more for coverage. Waiving these insurance regulations would also allow insurers to once again impose annual and lifetime limits on coverage and to require individuals to pay more in out of pocket costs.
The non-partisan Congressional Budget Office (CBO) released a preliminary analysis that estimates the Graham-Cassidy bill would reduce the federal deficit by $133 billion through 2026. CBO also estimates the number of people with comprehensive health insurance would be reduced by millions compared to current law due to the large reductions in Medicaid funding and subsides to purchase individual coverage, as well as the elimination of the individual mandate under Graham-Cassidy. CBO notes this analysis does not include more detailed estimates of the impact the bill is expected to have on insurance coverage or premiums because it would take them several weeks to conduct a more detailed analysis. However, Senate Republicans are running up against a Sept. 30 deadline to pass this legislation using special budget rules (known as reconciliation rules) that require only a simple majority to pass the bill, instead of the 60 votes needed under regular order in the Senate.
Other independent analyses of Graham-Cassidy also estimate drastic cuts to federal health funding to states and the Medicaid program, and that up to 32 million more Americans could be uninsured under the proposed bill. Given these estimates and the major disruption that would ensue in the individual insurance market and the Medicaid program, Graham-Cassidy is facing significant opposition from the health care sector, state officials, and the general public, similar to previous GOP efforts to repeal and replace the ACA. As of this writing, Senate Republicans appear to be short of the 50 votes needed to pass the bill, but they continue to make tweaks to persuade certain members of their party and some senators still hope to hold a vote this week.
Update: Senate Majority Leader Mitch McConnell has announced the Senate will not vote on the Graham-Cassidy bill.