WASHINGTON -- The Graham-Cassidy bill to repeal and replace the Affordable Care Act (ACA) , the Congressional Budget Office (CBO) estimated Monday.
The bill also would reduce the federal deficit by at least $133 billion, CBO said. "Those savings would occur mainly because, under the legislation, outlays from new block grants between 2020 and 2026 would be smaller than the reduction in net federal subsidies for health insurance. Funding would shift away from states that expanded eligibility for Medicaid under the Affordable Care Act (ACA) and toward states that did not," the authors wrote.
The report did not include specific estimates on how many people would lose their health insurance or how much premiums would increase, because the CBO said it did not have time to do that analysis prior to the Senate's vote on the bill, which is expected by the end of the week.
But, it did hint at what might happen.
"The number of people with comprehensive health insurance that covers high-cost medical events would be reduced by millions compared with the baseline projections for each year during the decade, [we] estimate," the report said. "That number could vary widely depending on how states implemented the legislation, although the direction of the effect is clear."
Three Reasons for Increase in Uninsured
The CBO said there were three reasons more people would be uninsured as a result of the bill: "First, enrollment in Medicaid would be substantially lower because of large reductions in federal funding for that program. Second, enrollment in non-group coverage would be lower because of reductions in subsidies for it. Third, enrollment in all types of health insurance would be lower because penalties for not having insurance would be repealed."
On the flip side, "Those losses in coverage would be partly offset by enrollment in new programs established by states using the block grants and by somewhat higher enrollment in employment-based insurance. Many of the new programs would probably cover people with characteristics similar to those of people made eligible for Medicaid by the ACA. The decrease in the number of insured people would be particularly large starting in 2020, when the legislation would make major changes to federal funding for Medicaid and the nongroup market."
Given these numbers, "It's hard to understand why any senators who opposed the previous health care plan in the Senate would support this one," said Gail Wilensky, PhD, senior fellow at Project HOPE in Bethesda, Md. and a former administrator of the Centers for Medicare & Medicaid Services under President George H.W. Bush. "It's pretty clear that, rightly or wrongly, if [the CBO] had had time, they would have scored the bill as a big 'hit'," in part because the bill gets rid of the individual mandate. The CBO "always believes if there's no mandate a lot of people won't buy, which says something about the attractiveness of the mandate."
Block Grants to States
The bill, introduced Sept. 13th by senators Bill Cassidy, MD (R-La.), Lindsey Graham (R-S.C.), Dean Heller (R-Nev.), and Ron Johnson (R-Wis.), would give money annually to states in the form of a block grant, which could be used "to help individuals pay for healthcare," Cassidy's office said in a press release posted on the senator's website.
"This proposal removes the decisions from Washington and gives states significant latitude over how the dollars are used to best take care of the unique health care needs of the patients in each state," the press release stated. "The grant dollars would replace the federal money currently being spent on Medicaid expansion, Obamacare tax credits, cost-sharing reduction (CSR) subsidies, and the basic health plan dollars."
The amount of money each state would receive is based on a complicated formula that starts with the amount of money each state receives from Medicaid expansion, ACA tax credits, CSR subsidies, and basic health plan funds. "By 2026, at base rate, every state will be receiving the same amount of money for each beneficiary in the 50-138% federal poverty level range," according to an FAQ on Cassidy's website. "This ensures that high-spending states and low-spending states come to parity at the end of the time frame."
In addition to repealing the ACA's individual and employer mandates, the bill would eliminate the medical device tax, and would "strengthen the ability for states to waive Obamacare regulations," the release continued.
Importantly, it would continue to "protect patients with pre-existing medical conditions."
Changes to Woo Support
Over the weekend, Senate Republicans in an apparent attempt to sway senators Lisa Murkowski (R-Alaska) and Susan Collins (R-Maine) -- who each indicated they are not yet supporting the bill -- to change their minds.
"The new draft expands support for 'low-density' states, a definition that includes Alaska and several other states with low-population density," Timothy Jost, JD, professor of law emeritus at Washington and Lee University, in Lexington, Va., wrote in a . "The new draft reserves 5% of the $25 billion in short-term 2020-2021 market stability funds for low-density states. It increases the amount of the 'base period' which serves as the basis of block grant funding for low-density states where current spending per capita is more than 20% of the mean of per capita spending for other states, a category that may only include Alaska."
Maine would get 43% more funding under the revised bill than it now receives under current law, . However, that apparently was not enough for Collins, who . She joined Republican senators Rand Paul, MD (R-Ky.) and John McCain (R-Ariz.), who had previously announced their opposition to the measure, leaving Republican leaders one vote shy of the 50 votes they need to pass it.
With this report, the CBO “makes clear that it can’t properly score the bill without weeks of additional work,†said Harold Pollack, PhD, professor of social service administration at the University of Chicago, in an email. “Since this is an evolving bill, that is hardly surprising. What they do note indicates that this bill would substantially damage health insurance markets and state health policy across the United States.â€
“This should be fatal to the bill, not because of any specific number in the CBO report, but because their granular analysis indicates that this an amateurish and radical measure which imposes drastic cuts, even as it requires states to act within 2 years to radically reshape their healthcare financing system,†he concluded. “If legislative craftsmanship matters for Senate outcomes, this report will be the final nail in the coffin.â€