Other key Republican health plans introduced this year actually have kept a good deal of the Affordable Care Act intact, except with dramatically less funding.
Take, for example, the Better Care Reconciliation Act, which the House passed in May. That bill certainly included deep cuts to the health law's coverage programs, which is why the Congressional Budget Office estimated it would cause 22 million Americans to lose coverage.
But it also kept some key Obamacare programs. It envisioned a future for the marketplaces, where some Americans receive subsidies to purchase health coverage. Granted, those subsidies were much smaller than those that exist in current law, and they would only cover skimpier health plans. But they still existed under the BCRA, in a nod to how entrenched that program has become in the American health care system.
The BCRA also sharply reduced funding for the Medicaid expansion. Right now, the federal government covers 90 percent of the cost of this program. BCRA would have reduced that funding down to a lower match (each state would have a different match rate, and they vary between 50 to 70 percent).
The future that Graham-Cassidy envisions is much, much different. This bill would not give states the option to continue the Medicaid expansion at a lower match rate. It would not mandate that middle-income Americans receive financial help to purchase insurance coverage. Those programs would end in 2020.
Instead, Graham-Cassidy would lump together all the money spent on these two programs across the country — about $1.8 trillion according to the Congressional Budget Office. It would dial back that spending significantly, like other plans: cutting it by $239 billion between 2020 and 2026.
Then, going much further than other Republican plans, it would use a new and complex formula to redistribute money from states that expanded Medicaid to those that do not participate in the program. States would be able to use this new lump sum for all sorts of things.
"A state could say, I'm going to take all this money to pay doctors for uncompensated care and not provide any health coverage," Park says. "You can spend the money on a whole host of other services that have nothing to do with expanding insurance coverage."
The list of the options, which begins on page 8, says states can use the money to:
- Establish a program to "help high risk individuals in the purchase of health benefits coverage"
- "Stabilizing premiums and promoting state health insurance market participation"
- Pay health providers for "the provision of health care services"
- Create a fund to cover "out-of-pocket costs such as co-payments, coinsurance, and deductibles of individuals enrolled in the individual market"
- Create programs "to help individuals purchase health benefits coverage"
"There is no mandate, no requirement for any financial assistance to purchase health insurance," Park says. And this means it's essentially up to states to decide, in two years, what sort of health care system they want to run. There is no template to follow. As Kaiser Family Foundation's Larry Levitt notes, this becomes disruptive because "we have no idea what states would do."
Graham-Cassidy introduces an entirely novel funding mechanism for distributing this funding: moving money from states that have worked aggressively to expand coverage to those that have made little effort at all. It creates a funding formula that is meant to give states "more equal" health care funding, tethered to the size of their population.
Perversely, this punishes the states that have expanded coverage the most, either by expanding Medicaid or getting a lot of people signed up for the marketplace (and thus have higher marketplace subsidies flowing into their state).
This, again, is something we do not see in the other Republican bills. No other bills contemplated simply taking money from Ohio, which expanded Medicaid, and sending it to Virginia, which didn't.
Look, for example, at what happens in Florida, a state that hasn't expanded Medicaid but has worked diligently to get its residents enrolled in marketplace coverage. Florida has signed more of its Obamacare-eligible residents up for coverage than any other state. It has the biggest marketplace in the country, and its residents received $5.8 billion in Obamacare tax credits in 2016.
What reward does Florida get in Graham-Cassidy for expanding coverage so dramatically? A $2.6 billion budget cut. And again, this happens specifically becauseFlorida has signed so many people up for Obamacare coverage and thus its residents receive a generous amount of health law tax credits.
The idea of expressly cutting funding for states that have done the best at getting their residents coverage doesn't show up in any other health care plan except Graham-Cassidy.
Lastly, Graham-Cassidy makes the unexpected decision to classify this new pot of funding as temporary rather than permanent, and have it sunset in 2027. Cassidy's office argues this is necessitated by Senate budget rules, but analysts who have looked at the bill say that isn't the case at all. "In reality, however, nothing in those rules prevents the bill from permanently funding its block grant," Park writes with his colleague Matt Broaddus.
The Medicaid spending in this bill, for example, is funded as a permanent program rather than a temporary one. This isn't a choice you see made in other Republican repeal bills.
The result is a massive cliff in 2027, where this lump-sum health program disappears entirely, amounting to a $299 billion cut in just one year.