After a dramatic series of failed Senate votes in July, there’s one repeal-and-replace plan for the Affordable Care Act left standing. Trump is pushing for a vote, per Politico, but the bill has yet to gain significant traction.
The proposal, crafted by Sens. Bill Cassidy, R-La., Lindsey Graham, R-S.C., and Dean Heller, R-Nev., essentially turns control of the health-care markets over to the states. Rather than funding Medicaid and subsidies directly, that money would be put into a block grant that a state could use to develop any health-care system it wants. It also allows states to opt out of many ACA regulations. “If you like Obamacare, you can keep it,” Graham has said, using a common nickname for the health-care law. “If you want to replace it, you can.”
In reality, that may not be true. The Medicaid expansion and subsidy funding would be cut sharply compared to current spending, going to zero in a decade.
“You can’t actually keep the same program if your federal funding is being cut by a third in 2026,” said Aviva Aron-Dine, a senior fellow at the left-leaning Center on Budget and Policy Priorities. And even putting aside the cuts, she said, the block grant structure would fundamentally change the health-care landscape. “[Funding] is capped, so it wouldn’t go up and down with the economy,” when fewer or more people become eligible for subsidies.
Republicans contest this. The drop in funding “gives strong incentives for the states to be more efficient with their program,” said Ed Haislmaier, a senior fellow at the conservative Heritage Foundation. That is, states may be able to maintain the ACA structure and regulations as long as they streamline operations.
If the streamlining turns out to be insufficient, the cuts would hit liberal states the hardest, according to a report by the Center for Budget and Policy Priorities. This is largely because they tend to be the biggest spenders on health care: They’ve expanded Medicaid and aggressively signed people up for marketplace coverage. They have the most to lose.
On the whole, Aron-Dine says, “This is a lot more similar to the [Senate repeal bill] than different. All of them end with devastating cuts to marketplace subsidies, Medicaid, and weakening of consumer protections.”
Haislmaier agreed, pointing out the Cassidy-Graham plan was originally intended as an amendment to the Senate bill.
Here’s the nitty gritty of what would change, compared to the ACA and the Senate plan that failed in July:
Who would need to be covered
Under the Cassidy-Graham plan, the mandates would be eliminated at the federal level. States could choose to keep the measure, replace it or get rid of it completely.
ACA: The individual mandate requires most Americans to have health coverage or pay a fine.
Failed Senate bill: Instead of the mandate, people who had a break in coverage would have to wait six months before getting new coverage, incentivizing healthy people to stay in the market. Being on a bare-bones plan counts as a break in coverage.
Cassidy-Graham proposal: The individual mandate would be eliminated. There would be no replacement on the federal level, but states could make one, or even reinstate the mandate.
ACA: The employer mandate requires larger companies to offer affordable coverage to their employees.
Failed Senate bill: The employer mandate would be eliminated.
Cassidy-Graham proposal: The employer mandate would be eliminated.
ACA: Young adults could stay on their parents’ health insurance plan until they’re 26 years old.
Failed Senate bill: This provision would be unchanged.
Cassidy-Graham proposal: This provision would be unchanged.
How they would pay for coverage
The federal health insurance subsidies that help most people with ACA marketplace plans afford their coverage would change. This bill would shift those subsidies to the state-level, so people in some states may see their subsidy scaled back or eliminated.
ACA: ACA subsidies are primarily based on income, age and geography, which benefits lower- and moderate-income people buying coverage through ACA marketplaces.
Failed Senate bill: Subsidies would be primarily based on age, income and geography. But, they could cover a narrower plan, and people would need to make less money than under the ACA to receive them.
Cassidy-Graham proposal: ACA subsidies would be eliminated. Instead, states could use money from their block grant to provide subsidies themselves.
ACA: Cost-sharing subsidies were provided to insurers to help some of their ACA customers cover deductibles and co-payments.
Failed Senate bill: These subsidies would end in 2020, although Trump could cut them off earlier.
Cassidy-Graham proposal: Cost-sharing subsidies, along with premium subsidies, would end in 2020. But states could choose to use their block grant to fund cost-sharing subsidies.
ACA: Insurance companies are not allowed to increase someone’s premiums or deny coverage based on preexisting conditions.
Failed Senate bill: Insurance companies are able to consider preexisting conditions when charging customers, as long as they also offer at least one plan that doesn’t. Experts expect this to drive up costs for sicker people. Also, states may allow them to not cover costs associated with some conditions.
Cassidy-Graham proposal: The ban is unchanged, but states could allow them to not cover costs associated with some conditions.
ACA: Insurers can charge older customers up to three times as much as they charge younger customers.
Failed Senate bill: Insurers would be able to charge older customers up to five times as much as they charge younger customers.
Cassidy-Graham proposal: Insurers would be able to charge older customers up to five times as much as they charge younger customers. However, states could overrule this.
ACA: Individuals can contribute up to $3,400 and families up to $6,750 to pretax health savings accounts.
Failed Senate bill: People can contribute more to their health savings accounts than under the ACA. People could also begin to use their HSAs to pay for premiums.
Cassidy-Graham proposal: People can contribute more to their health savings accounts than under the ACA, among other changes making HSAs more attractive.
ACA: The ACA did not create high-risk pools, because there were other protections for preexisting conditions.
Failed Senate bill: The stability fund would receive $182 billion over 10 years and would be aimed at reimbursing insurers who take big losses. This is $70 billion higher than the previous version of the bill. The new bill also adds $45 billion to address the opioid epidemic.
Cassidy-Graham proposal: A temporary fund aimed at reimbursing insurers who take big losses would get $155 billion to use from 2018 to 2020.
Proposed changes to Medicaid
The bill would restructure Medicaid and decrease its funding. That would make it very difficult for states to maintain the Medicaid expansion.
ACA: Medicaid is an entitlement program with open-ended, matching federal funds for anyone who qualifies.
Failed Senate bill: Medicaid would be funded by giving states a per capita amount or block grant, beginning in 2021. The amount would grow more slowly than in the House bill, meaning bigger spending cuts overall. States would be able to exceed this cap in the case of public health emergencies.
Cassidy-Graham proposal: Medicaid would be funded by giving states a per capita amount beginning in 2020.
ACA: States can expand Medicaid to cover people making up to 138 percent of the poverty line, and the federal government would cover an outsize portion of their costs.
Failed Senate bill: For states that expand Medicaid, the federal government would pay a smaller portion of the cost starting in 2021.
Cassidy-Graham proposal: For states that expand Medicaid, the federal government would pay a smaller portion of the cost starting in 2020.
Other key elements of the plans
ACA: Insurers are required to cover certain categories of essential health benefits, such as hospital visits and mental-health care.
Failed Senate bill: States would be allowed to change what qualifies as an essential health benefit. Insurance companies would also be able to sell bare-bones plans, as long as they also offer at least one that’s comprehensive. Experts expect this to drive up costs for sicker people.
Cassidy-Graham proposal: States would be allowed to change what qualifies as an essential health benefit.
ACA: Planned Parenthood is eligible for Medicaid reimbursements, but federal money cannot fund abortions.
Failed Senate bill: Planned Parenthood would face a one-year Medicaid funding freeze.
Cassidy-Graham proposal: Planned Parenthood would face a one-year Medicaid funding freeze.
ACA: Caps on annual or lifetime coverage are banned for essential health benefits.
Failed Senate bill: States could opt out of the ban, or narrow what qualifies as an “essential health benefit.”
Cassidy-Graham proposal: The ban would stay in place, but states could narrow what qualifies as an “essential health benefit.”
About this story: Block grant amounts from Center for Budget and Policy Priorities analysis. Legislative content from Kaiser Family Foundation report. “Failed senate bill” refers to the most recent version of the Better Care Reconciliation Act, including the amendment by Sen. Ted Cruz, R-Texas.
GAZETTE COVERAGEEnsure access to everything we do, today and every day, check out our subscribe page at DailyGazette.com/Subscribe
More from The Daily Gazette: