IS it good enough as a healthcare replacement bill?
A Closer Look
September 21, 2017
On July 13, 2017, Senators Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.) released a proposal to modify the Affordable Care Act (ACA), also known as Obamacare.
The plan was also introduced as an amendment to the Better Care Reconciliation Act during the Republican effort to repeal the ACA in July 2017. The proposal is a reconciliation bill, which would only impact the budgetary and fiscal provisions of the ACA.
The bill does not contain a provision to repeal the law in its entirety.
Instead, the bill would keep in place most of the ACA’s taxes and fees and send that money to the states for them to make changes to health insurance and healthcare at the state level.
On September 20, 2017, a spokeswoman for Senate Majority Leader Mitch McConnell (R-Ky.) said, “It is the Leader’s intention to consider Graham/Cassidy on the floor next week.”
HIGHLIGHTS of HR 1628 (to provide for reconciliation pursuant to title II of the concurrent resolution on the budget for fiscal year 2017) :
The proposal would repeal the federal premium tax credits and the cost-sharing reductions provided to individuals under the ACA. States could create their own system of tax credits and subsidies if they chose.
The federal rrequirements for individuals to obtain health insurance and for employers to offer it would be effectively eliminated by reducing the penalty to $0. States could establish their own requirements, if they chose.
The plan would appropriate $1.18 trillion between 2020 and 2026 for a healthcare grant program for states that could be used to establish programs or policies to help cover high-risk individuals, stabilize premiums, and reduce out-of-pocket costs.
In place of federal tax credits, cost-sharing reductions, and the Medicaid expansion, the proposal would fund a grant program for states to design their own systems for health insurance and healthcare.
The funds could be used to establish programs or policies to help cover high-risk individuals, stabilize premiums, and reduce out-of-pocket costs. The proposal would appropriate $1.18 trillion between 2020 and 2026 for the grant program. Funding would be allocated using a formula based on the amount of ACA-related federal funding provided to a state for the Medicaid expansion, tax credits, and cost-sharing reductions and the number of low-income individuals in a state. A more detailed outline of the formula can be found here.
In applying for the grants, states could request waivers from the following ACA provisions:
- The provision that restricts the extent to which insurers may vary premiums based on age or other factors, except restrictions on variations based on sex or other protected classes of individuals
- The provision the prohibits health insurers from varying premiums based on preexisting conditions
- The provision that requires insurers to cover a standard set of health benefits
- The provision that requires insurers to provide rebates to consumers if they do not spend a minimum percentage of premium revenue on medical services
Insurance market rules and funding
Many of the ACA’s iinsurance market rules would remain in effect.
- Insurers would still be prohibited from denying coverage for pre-existing conditions.
- Insurers would also still be required to allow dependents to remain on their parents’ insurance coverage until age 26.
- Under the proposal, any individual could purchase a catastrophic health plan; under the ACA, this was restricted to individuals under 30 or those who meet a hardship exemption.
The proposal would establish a fund of $25 billion to pay out to insurers to mitigate disruptions to health insurance coverage and address urgent health care needs. The funds would be paid out in 2019 and 2020. The bill would not fund cost-sharing reduction reimbursements and would end the program in 2020.
The Affordable Care Act allowed states to expand eligibility for their Medicaid programs to childless adults earning incomes below 138 percent of the poverty level. The Graham-Cassidy plan would end this Medicaid expansion and all federal funding for it on January 1, 2020.
Beginning in 2020, the bill would also convert Medicaid financing from an open-ended entitlement to a per-capita (i.e. per-member) amount. This amount would be adjusted based on the number of individuals in four distinct groups:
- elderly individuals
- blind and disabled individuals
- other adults
The law would set a target spending amount for states based on spending during a past two-year period that the state chose. Until 2025, the amount allotted to a state would increase each year by the medical component of the consumer price index (CPI) for urban consumers; for elderly individuals and blind individuals, it would increase by medical CPI plus 1 percentage point. After 2025, the amount would increase by the CPI each year. Beginning in 2020, states that spent more than the targeted amount on their Medicaid programs in any given year would receive a reduced amount of funding the following year.
States could also apply to receive their Medicaid funding in a block grant. The block grant would be capped based on the target per-member amount for the state multiplied by the number of enrollees and the percentage increase in the state’s population over the previous two years. The block grant amount would be increased in subsequent years by the CPI for urban consumers.
Under the proposal, state would be required to reevaluate the eligibility of Medicaid enrollees every six months. States would also be allowed to include a work requirement for non-disabled, non-elderly, non-pregnant adults enrolled in Medicaid. Under current law, states must obtain federal approval to include a work requirement.
Health savings accounts
The proposal would allow individuals with high-deductible health plans to use health savings accounts (HSAs) to pay premiums in excess of amounts that are already credited or deducted through the federal tax code.
The plan would also increase the limit on annual HSA contributions to the combined amount of the deductible and the limit on out-of-pocket spending. In 2017, high-deductible health plans had to have deductibles of at least $1,300 for an individual or $2,600 for a family. Out-of-pocket costs were limited to $6,550 for individuals and $13,100 for families. This means that under the plan, using 2017 figures, an individual could contribute $7,850 to a HSA each year and a family could contribute $15,700. By comparison, for 2016, these limits were capped at $3,350 for individuals and $6,750 for families.
The bill would suspend federal funding to community health centers that provide family planning, reproductive health, and related medical services and that also provide abortions for reasons other than rape or incest or to save the life of the mother. This would include the nonprofit organization Planned Parenthood. The funding would be suspended for one year.
(not sure where this is in the bill. Here is the exact wording:
SEC. 102. COMMUNITY HEALTH CENTER PROGRAM.
Effective as if included in the enactment of the Medicare Access and CHIP Reauthorization Act of 2015 (Public Law 114–10, 129 Stat. 87), paragraph (1) of section 221(a) of such Act is amended by inserting “, and an additional $422,000,000 for fiscal year 2017” after “2017”.)
The ACA tax on over-the-counter medications and 2.3 percent excise tax on medical devices would be repealed. The 40 percent excise tax on high cost employer-sponsored health coverage (known as the Cadillac tax) would not be repealed.
In addition, the tax penalty for withdrawals from health savings accounts for nonmedical expenses would be reduced from 20 percent to 10 percent.
Source (ALL emphasis mine)
NPR – “Graham-Cassidy Health Bill Would Shift Funds From States That Expanded Medicaid”
CNBC – “These states would get hit hardest by latest GOP health care bill”
Real Clear Politics – “Sen. Rand Paul Responds To Trump On Cassidy-Graham Health Care Bill: “I Promised Repeal”
The Atlantic – “Doctors: No. Physicians rarely agree on anything as strongly as they do that the Graham-Cassidy health-care bill is harmful.”
Forbes – “Insurance Industry Comes Out Against Graham-Cassidy Trumpcare Bill”
US News – “Bipartisan Governors Oppose Graham-Cassidy”
I definitely would expect some kick back crying from Democrat states and big insurance lobbyists BUT I have my own objections.
First, there are already expanded Medicaid enrollments that would be adversely affected by the whims of this congress.
Second, why in the world remove community health center programs after 2017? Is there a better method separately that will help them. (No I don’t mean Planned Parenthood, they do NOT deserve a dime.)
Third, and most importantly, this is NOT what the American citizens voted for. We want a complete REPEAL and a REPLACE with more succinct, clearly defined information that will stand up to public scrutiny, not just congressional malarkey. TRANSPARENCY not subterfuge.
As usual congress has decided to weasel out. Apparently they have NOT learned their lesson. REPEAL then REPLACE is what the public has demanded.
We all know from experience that a major fubar mistake needs to be restarted FROM THE BEGINNING. It is all well and good to want to be lazy and not repeat the exact wording or steps. However, that is NOT anything but time-consuming, wasteful spending, and inevitably leads to misunderstanding and compounds errors.
I again point to the fact that IF A BILL IS WORTH SUBMITTING then it is worth submitting in TOTAL not in “replace X with Y or dumm-te-dumm”. If one is correcting “syntax errors” then fine do the “replace” bit but otherwise say repeal Law NML and replace it with Law ARGK.
How frigging hard can it be to say:
- Repeal ACA
- Open state borders to insurance competitiveness
- State decides its insurance needs and its methods so long as the basic parts are in sync with the coverage of : elderly, permanently disabled, indigent, workers under $.. income, and allows for proportional coverage based upon health savings accounts for which those in the above categories are covered through Medicaid grants to the states in addition to Health block grants.
- States received $.. dollars based upon total CITIZENs from their census. (No illegal, refugee, or other would be involved but must fall under a different minimal coverage insurance system.) They would be responsible for making sure state payroll taxes were expanded and health savings accounts were maintained. If they didn’t then reduce ANY grants or federal aid to their state as a fine or reduce their block grant by whatever means necessary to achieve a better result.
Good heavens these people would make the very act of death itself into a major production that even the Grim Reaper would be rolling non-existent eyes at with their attempts to cover up, protect lobbyist interests, pander to, and kiss arse.