Correction: An earlier version of this story incorrectly stated the Cassidy-Graham bill's effect on the traditional Medicaid program.
A group of four Republican senators on Wednesday introduced a bill (HR 1628) to repeal major portions of the Affordable Care Act (ACA) and replace the law's Medicaid expansion with federal block grants managed by each state.
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The bill introduced by Republican Sens. Lindsey Graham (S.C.), Bill Cassidy (La.), Dean Heller (Nev.), and Ron Johnson (Wis.) attempts to equalize federal health care spending between states that expanded Medicaid and states that did not.
During a press conference unveiling the bill, the senators portrayed the bill as the last and best attempt for GOP lawmakers to fulfill their promise to repeal the ACA. Graham said, "If you believe repealing and replacing Obamacare is a good idea, this is your best and only chance to make it happen because everything else has failed except this approach, which will work." In a nod to the Medicare-for-all bill Sen. Bernie Sanders released Wednesday, Graham added, "Single-payer health care for all [is] inevitable if we fail."
According to an FAQ, the measure would maintain many of the ACA's funding provisions but would repeal the law's taxes on non-qualified spending from health savings accounts (HSAs), medical devices, and over-the-counter medications. The measure also would repeal the ACA's individual and employer mandates retroactively to 2016.
Like the Senate's Better Care Reconciliation Act, the Cassidy-Graham bill would reform the Medicaid program by shifting its funding structure to a per capita cap system.
The bill also would end the ACA's Medicaid expansion. Beginning in 2020, all states would begin to receive block grants that they could use to provide coverage to low-income individuals. The proposal would allocate about $1.2 trillion for Medicaid from 2020 to 2026.
The block grants would be provided under CHIP and funded by the federal money currently being spent on the ACA's Medicaid expansion, premium tax credits, and cost-sharing reduction payments to insurers. The amount of funding each state would receive would be based on a formula that takes into account several factors, including the federal funding states currently receive for Medicaid expansion and cost-sharing under the ACA, as well as the number of residents with annual incomes between 50 and 138 percent of FPL.
According to an FAQ, the bill aims to achieve parity in federal Medicaid spending by 2026 when "at base rate, every state will be receiving the same amount of money for each beneficiary in the 50 and 138 percent FPL range." According to Politico, while the formula would increase funding for some states, others, particularly those with high health care costs such as Massachusetts, are likely to see their Medicaid funding levels decline from current levels.
The bill would give states broad flexibility on how they spend the funding, but specifies that at least 80 percent must be spent on providing coverage for the Medicaid expansion population. For instance, the bill suggests states could create high risk or reinsurance pools, assist individuals with out-of-pocket costs, partner with insurers to create managed care plans, or "pay providers for the provision of health care services."
The bill also would expand the use of HSAs, and allow states to waive or change most of the ACA's insurance regulations, such as the law's essential health benefits. However, according to the Washington Post's "PowerPost," states would be barred from waiving the law's protections for individuals with pre-existing medical conditions
Larry Levitt, senior vice president of the Kaiser Family Foundation, said the bill would mark a significant shift in state autonomy. He said, "It's a massive devolution of federal money and responsibility to states, on a scale I don't think we've ever seen," adding, "Over time, it's less federal money than is being spent now on health care, but it's still a huge pot of money available to states with very few strings attached."
Several provider groups, including American Academy of Pediatrics, opposed the bill, saying it would harm access to coverage and care, Politico's "Pulse" reports.
Jack Ende, president of the American College of Physicians (ACP), in a letter to Graham and Cassidy wrote, "We believe that the substantial cuts to Medicaid authorized by this legislation would cause a significant increase in the number of uninsured patients and that it would undermine essential benefits provided for patients insured under current law."
Planned Parenthood, which would receive no federal funding under the bill, also opposed the bill, saying, "It blocks women from getting preventive care at Planned Parenthood. It slashes Medicaid, which one in five women of reproductive age rely on for care, including birth control and cancer screenings. It guts essential health benefit protections, including maternity coverage and prescription drugs. Thirteen million women could lose coverage to maternity care under this bill. And it raises premiums on millions more by eliminating tax credits."
The bill also drew criticism from the conservative Heritage Action for America. The group's CEO, Michael Needham, in a statement said, "Based on what we know right now, Graham-Cassidy would make some improvements over the status quo but it would not actually deliver on the Republicans' seven-year campaign promise to repeal and replace Obamacare."
It remains unclear whether senators have the 50 votes needed to pass their bill, and they face a tight timeline, about two and a half weeks, to bring the bill to the Senate floor under budget reconciliation rules, Politico reports.
According to "PowerPost," the senators would need to move the bill through the relevant committees, have it scored by the Congressional Budget Office, and bring it to the Senate floor for a vote before the budget resolution expires on Sept. 30. According to Politico, CBO has had the bill for about a week.
And ultimately, for the bill to become law, lawmakers need at least 50 senators to vote for the bill. President Trump yesterday praised the senators' efforts but did not state whether he would encourage lawmakers to support it. Further, Senate Majority Whip John Cornyn (Texas) said he has not seen evidence that the bill had the votes needed to win approval in the Senate (Sausser, Post and Courier, 9/13; FAQ document, 9/13; Bill breakdown, 9/13; Pear, New York Times, 9/13; Diamond, "Pulse," Politico, 9/14; Frieden, MedPage Today, 9/14; Weigel/Goldstein, "PowerPost," Washington Post, 9/14; Haberkorn, Politico, 9/13; Radnofsky, Wall Street Journal, 9/13; McIntire, CQ HealthBeat, 9/13 [subscription required]).
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