There is pretty much one thing you need to understand about the last-minute Obamacare repeal bill Republicans are currently attempting to pass before a drop-dead deadline at the end of September. Of the three major pieces of health care legislation the GOP has considered this year, this one appears to be the most extreme—the closest the party could come to ending the Affordable Care Act without actually replacing it.
The GOP’s past two repeal plans—the American Health Care Act, which passed the House, and the Better Care Reconciliation Act, which failed in the Senate—followed the same broad outline. When it came to the individual market, the bills looked like severely degraded versions of Obamacare, offering relatively meager tax credits designed to buy cheap private insurance while allowing states to opt out from at least some of the Affordable Care Act’s most popular consumer protections. Both also rolled back the ACA’s Medicaid expansion while capping spending on traditional Medicaid for the first time. (On that last front, the Senate bill was notably more draconian.)
Both bills would have made it harder for many older, sicker, and poorer Americans to buy health coverage, potentially leaving tens of millions uninsured while dealing a historic blow to the government’s single largest health care program by enrollment. Some ideas that wormed their way into these bills—like the Cruz amendment—likely would have thrown the insurance markets into outright disarray. Some of the regulatory waivers may have been ripe for abuse. But at the very least, you could say they left in place a default system of support to help lower-income Americans to buy health plans, however measly it may have been.
The new Republican plan, put forth by Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, is different and in many ways more frightening. It repeals Obamacare but does not replace it in any meaningful sense. Instead, the bill would take the money that the government currently spends on the ACA’s premium subsidies and Medicaid expansion and dispenses it back to states in the form of block grants that they could use to fund their own health care experiments, whatever those might be. These grants would likely grow more slowly than the cost of insurance or medical care, thus cutting federal health spending by $239 billion over a decade. The law would also give states the right to waive most of Obamacare’s key regulations, including those that prevent insurers from charging more to people based on their health, so long as they explain their plan to “maintain access to adequate and affordable health insurance coverage for individuals with pre-existing coverage.” (It’s not clear if that plan has to be realistic.)
Some liberal states might try to preserve a system similar to Obamacare in a Graham-Cassidy world—like how Massachusetts had Romneycare before the country had Obamacare. But it would be hard, if not impossible, to replicate the real thing. That’s because the bill’s funding formula is designed not only to shrink federal spending on health care but to shift dollars from predominantly Democratic states that expanded Medicaid under Obamacare to predominantly Republican states that did not. It’ll be a smaller pie overall, and places like New York and California that are inclined to expand health coverage will be getting a smaller slice.
As for states that are generally tight-fisted about safety-net spending? Who knows what they’ll do. Graham-Cassidy lists six different ways states can use their block grant money—but the spending categories are purposely broad, and it’s entirely conceivable that an Alabama or Mississippi would use its money to supplant some of their existing state spending or patch budget holes. This has been a chronic problem with Temporary Assistance for Needy Families, which turned cash welfare into a block grant program in the 1990s, and may be the closest parallel to what Republicans are now angling to do to Obamacare.
All told, Graham and Cassidy aren’t really offering a health care proposal. Instead, they’re offering states a meager slush fund.
Worse yet, it’s a slush fund with a self-destruct function. Graham-Cassidy does not appropriate any money for its block grants after 2026. The cash just disappears. Cassidy has tried to write off this bizarre detail of the law as a mere technicality, claiming, according to Politico, that “budget restrictions prevent him from funding the block grants beyond 2026” and reassuring reporters that “Congress would keep the money flowing in the same way it’s continually agreed to fund the Children’s Health Insurance Program.” That is not a convincing excuse. The budget reconciliation rules—which Republicans are relying on to pass repeal with just 50 votes—only bar legislation that raises the long-term deficit. Since Graham-Cassidy’s block grants would actually cut federal spending, it should be possible to make them permanent. The fact that the senators apparently don’t want to is fairly ominous.
Finally, all of this is paired with a cap-and-cut approach to traditional Medicaid that is just as draconian as what the most recent Senate bill proposed.
The current version of Graham-Cassidy has only been out for about a week, meaning experts haven’t had a ton of time to digest the bill’s language. The deeper you wade into it, though, the more worrying some of the details seem to be. Edwin Park at the Center on Budget and Policy Priorities pointed out to me that Graham-Cassidy’s formula might actually penalize states for trying to help their residents buy more generous coverage. “It’s pretty crazy,” he told me. “You’re not only encouraging states to cover fewer people, but also to provide them worse coverage.” Unfortunately, Senate Republicans need to pass a bill before the Sept. 30 deadline, when their reconciliation vehicle expires. We should get a Congressional Budget Office score before then, but not with enough time to properly digest a piece of legislation that would remake much of the U.S. health care system.
But what we know about the bill already is frightening enough. And in many ways, it’s the perfect capstone to the entire Obamacare repeal process, in which Republicans have struggled to find any sort of coherent substitute for the health care law they want to dismantle. Republicans promised to repeal and replace Obamacare. By lining up behind Graham-Cassidy, they’ve essentially shrugged and said, “Let’s not and say we did.”