Amid attempts to agree on short-term stabilization of the Affordable Care Act (ACA) and Democrats coming out in support for a “Medicare-for-all” bill, a group of Republican senators unveiled what could be their last chance to repeal and replace the ACA.
The plan, known as Graham-Cassidy after its two earliest proponents, Sens. Lindsey Graham, R-South Carolina, and Bill Cassidy, MD, R-Tennessee, centers around block grants. It also shares some similarities with earlier ACA alternatives floated by Republicans, including repealing many of the law’s taxes and expanding state waivers on essential health benefits and medical-loss ratio requirements.
“If you believe repealing Obamacare is a good idea, this is your best and only chance to make it happen because everything else has failed,” Graham said at a Sept. 13 press conference.
Here are some of the key provisions of the bill and how the legislative calendar and industry opinion affect its chances of becoming law.
1. Block grants
The crux of the Graham-Cassidy legislation is replacing the ACA’s insurance subsidies and expanded Medicaid funding with a block grant to states. This change would go in effect in 2019, with states receiving $136 billion in funding, increasing to $190 billion in 2026, after which no funding level is specified. That money could be used for a number of different purposes, from ACA-like mechanisms such as premium assistance and reinsurance to the return of state-funded high-risk pools.
According to Health Affairs contributor Timothy Jost, the complex formula these funds would eventually result in steering money away from states which chose to expand Medicaid under the ACA and towards the non-expansion states. The liberal-leaning Center on Budget and Policy Priorities estimated the plan would cut federal healthcare funding by $239 billion compared to ACA levels through 2026.
Like previous ACA repeal efforts, the bill doesn’t make large-scale changes to the ACA’s Section 1332 waiver process to increase state “flexibility” on ACA requirements. States could apply for waivers, however, allowing insurers to base premiums based on health status, as well as waive requirements statewide on the ACA’s essential health benefits and medical-loss ratios.
The result of the latter could be skimpier, more expensive coverage. Charging more based on health status would also lead to much higher premiums for anyone with pre-existing conditions, even though like past Republican proposals, those enrollees could technically not be denied coverage as in the pre-ACA market.
3. Tax cuts for healthcare industry
The legislation would cut several taxes which affect healthcare organizations. The ACA’s tax on medical device will be repealed in 2018, though the law’s health insurance tax would remain in place. It would also phase down the Medicaid provider tax from its current level of 6 percent down to 4 percent by fiscal year 2025.
4. Slim chance of passing
Several political and legislative factors have the odds stacked against the Graham-Cassidy bill. One is timing—the budget reconciliation authority Republicans have tried to use to pass a repeal-and-replace bill with 50 votes in the Senate expires on Sept. 30. White House adviser Kellyanne Conway has said President Donald Trump would sign the bill, but Senate Republicans have shown little enthusiasm for another ACA repeal vote after the last one ended in failure.
“I don't think it's going anywhere,” said Sen. Rand Paul, R-Kentucky, adding he would vote against the measure. “I haven't heard anybody talking about it.”
With Paul already a no vote, Republicans would have to convince either Sen. Lisa Murkowski, R-Alaska, or Sen. Susan Collins, R-Maine, to support the bill, even though they’ve been against each repeal-and-replace bill put up for a vote this year. Republican leaders have also shown little desire to revive the repeal debate, having moved onto working with Democrats on a short-term stabilization bill.
5. Association opposition
The bill would also have to contend with opposition from within the healthcare industry, with groups such as the American College of Physicians already coming out against it.
“Rather than continue with an effort to repeal and replace the Affordable Care Act, we urge you to set aside this legislation and instead, focus on bipartisan efforts to stabilize the health insurance marketplaces, create competition among insurers, and lower the costs of health care for all Americans,” wrote ACP President and CEO Jack Ende, MD.