Column: The GOP’s last-ditch Obamacare repeal bill may be the worst one yet
Republicans have until Sept. 30 to try passing Cassidy-Graham, the GOP’s last-ditch Obamacare repeal bill, in the Senate with only 50 votes under the chamber’s rules. (Sept. 18, 2017) (Sign up for our free video newsletter here http://bit.ly/2n6VKPR
The Republican effort to repeal the Affordable Care Act is back, a zombie again on the march weeks after it was declared dead. The newest incarnation is Cassidy-Graham, named after chief sponsors Bill Cassidy of Louisiana and Lindsey Graham of South Carolina.
Compared with its predecessors, the bill would increase the ranks of America’s medically uninsured more — by millions of people — cost state governments billions more and pave the way for the elimination of all protection for those with preexisting medical conditions.
Among the biggest losers of federal funding would be the states that had the foresight to expand Medicaid under the Affordable Care Act and the resolve to reach out to lower-income residents to get them coverage; they’d be punished with draconian cuts in healthcare funding. Among the big winners would be states that have done nothing of the kind for their residents — refusing the Medicaid expansion and interfering with outreach efforts. They’d be rewarded for their stupidity and inhumanity with an increase in federal funds.
Over the last week or so, reviews of the measure have been pouring in from healthcare experts, and they’re almost unanimously negative. Major health provider and consumer organizations have turned thumbs down, as have analysts looking at its economic effects.
Money would move toward states, predominantly Republican, that have not expanded Medicaid.
— Healthcare expert Timothy Jost
Fitch Ratings, which keeps an eagle eye on the fiscal condition of states issuing bonds, judges Cassidy-Graham “more disruptive for most states than prior Republican efforts.” Fitch finds that “states that expanded Medicaid access to the newly eligible population under the Affordable Care Act (ACA) are particularly at risk under this latest bill.”
The bill surfaced just as the political tide seemed to be shifting away from the GOP campaign to roll back the gains in health coverage experienced by Americans over the last seven years under the Affordable Care Act. Democrats are coalescing around universal health coverage — “single-payer,” as it’s typically termed — teeing up the issue for the 2018 election. It’s notable that the rise in public support for this approach, at least in the abstract, has coincided with the GOP’s so-far unsuccessful repeal effort. The emergence of the new bill also comes as other Republicans are scheduling hearings and reaching across the partisan aisle to craft a sensible plan to shore up the Affordable Care Act marketplace.
Despite those drawbacks, Cassidy, Graham and their co-sponsors are trying to push the measure through by Sept. 30, the last day it could be passed with only 50 votes (plus a tie-breaker cast by Vice President Mike Pence) under Senate reconciliation rules. After that, it would need a filibuster-proof count of 60 votes, meaning it could — and presumably would — be blocked by Democrats. The deadline places more pressure on the Congressional Budget Office, which must analyze the bill before it can come to a vote, to move fast.
The CBO, however, announced Monday that it will be unable to complete a full analysis before Sept. 30. “CBO will not be able to provide point estimates of the effects on the deficit, health insurance coverage, or premiums for at least several weeks,” the agency said. That means senators will be voting without any sense of how the bill will affect the most fundamental factors in healthcare.
It also raises the question of how people like Arizona’s Republican Gov. Doug Ducey can say, as he did Monday, that the bill is “the best path forward to repeal and replace Obamacare.” How could he know? That’s important, because Ducey’s support is thought to be crucial in securing the votes of Arizona Sens. Jeff Flake and John McCain. Flake already said he would support the bill, but McCain has been cagey.
Those are the procedural issues. Now let’s turn to the text, and the issue of why anyone would think Cassidy-Graham would improve America’s healthcare system.
In broad terms, the measure would terminate the Affordable Care Act’s Medicaid expansion, premium and cost-sharing reduction subsidies, tax credits for small businesses, and a host of other pro-consumer provisions by 2020. It would eliminate the act’s individual and employer mandates retroactive to Dec. 31, 2015.
The block grant to states, which Cassidy and Graham portray as one of their bill’s chief virtues, is in fact a poisoned chalice any governor would be a fool to accept. The proposal, Cassidy said in unveiling the bill, “gives states significant latitude over how the dollars are used to best take care of the unique healthcare needs of the patients in each state.” That papers over its significant drawbacks.
By their nature, when block grants are proposed to replace existing programs, they’re almost always back-door mechanisms to reduce federal spending. That’s the case here. The Cassidy-Graham block grants would replace the money now being spent on Medicaid expansion and the premium and cost-sharing subsidies, and a couple of other spending provisions. But the existing spending is pegged to demand — Medicaid funding adjusts automatically to enrollment and the medical needs of the enrollees, and the subsidies are pegged to enrollee incomes and the premiums charged by insurers for benchmark Obamacare plans.
Block grants would be fixed, changing only according to a complex formula. And that formula would be “insufficient to maintain coverage levels equivalent to the ACA,” the Center on Budget and Policy Priorities calculated last week. Between 2020 and 2026, the center reckoned, the grant would provide $239 billion less than projected federal spending for the existing Medicaid expansion and subsidies. In 2026 alone, the shortfall in Medicaid and subsidy funds together would total $80 billion.
What’s worse is that the grant would be unable to respond to real-world conditions. Consider how healthcare costs are likely to rise in Texas and Florida in response to this summer’s floods, which drove thousands of residents out of their homes and increased the threat of water-borne disease. They’d get no help from the block-grant formula. To provide needed care to their residents under Medicaid or any other state programs, they’d have no choice other than to limit enrollments, cut benefits, charge higher premiums or co-pays, or drain funds from other federally funded programs.
As set forth in the bill, the formula would “over time move money away from states, predominantly Democratic, that have expanded Medicaid and aggressively pursued enrolling their lower income populations in Medicaid and exchange coverage,” observes healthcare expert Timothy S. Jost. “Money would move toward states, predominantly Republican, that have not expanded Medicaid.”
Some Medicaid expansion states would lose as much as 60% of what they would be due under current law. According to the numbers crunched by the Center on Budget and Policy Priorities, among the states that went all-in on Obamacare, including expanding Medicaid and mounting aggressive enrollment support for the marketplaces, California would get $27.8 billion less in federal funding in 2026, New York $18.9 billion less, and Massachusetts $5.1 billion less.
States that shunned the Affordable Care Act would make out like bandits: Texas, which showed absolutely no regard for its ACA-eligible population, would get $8.2 billion more in 2026, and Mississippi, another black hole for healthcare reform, would get $1.4 billion more. This is how carrot-and-stick approaches to healthcare reform work — in the Bizarro world. (Apologies to Jerry Seinfeld.) In any case, all the federal funding would disappear after 2026. According to Fitch, “over time even non-expansion states will face budgetary challenges given the proposed changes to Medicaid, which will likely accelerate for all states over time.”
The states could also request waivers of the act’s all-important protections for people with preexisting medical conditions. The law forbids insurers to charge anyone more based on their medical condition or history, except for a modest increase in premiums based on age and a surcharge for smokers. Previous GOP repeal bills have substituted a “continuous coverage” provision, which protects applicants who haven’t let their coverage lapse for a month or two from being surcharged when they renew.
Cassidy-Graham throws out that protection. It would allow states to request a waiver allowing insurers to charge more “as a condition of enrollment or continued enrollment… on the basis of any health status-related factor.” Translation: Under such a waiver, insurers could check applicants’ health or medical histories before setting premiums — even for renewals.
Finally, there’s that crucial Republican litmus test — abortion. The bill bars any insurance policy receiving federal funds — that is, a policy whose enrollees get subsidies or that is subject to payments under the Affordable Care Act’s reinsurance rule — from offering coverage for abortions except when the mother’s life is in jeopardy or in cases of rape or incest.
Remarkably, this bill’s sponsors are pitching it as a moderate, common-sense alternative to its predecessors. They may also be hoping that opposition fatigue has set in, and that they’ll be able to steamroll the measure through while the public is distracted by other issues. As with other repeal efforts, this one is being brought out without a minute of hearings.
Cassidy asserts that this measure is a blow for equality. The measure “treats all Americans the same no matter where they live.” He’s right, in a way: It treats all Americans as potential victims of insurance company profiteering.
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1:42 p.m.: This post has been updated with statements by the CBO and Arizona Gov. Doug Ducey.
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