Yes, they managed to make it even worse

Late last night, revised text was released for the Graham Cassidy repeal and replace legislation.

The headlines are saying that Maine (among a few other states) will benefit from the new language in an attempt to convince Senator Collins to vote for the bill.

Take those headlines with a huge grain of salt. The estimates being used are from the bill’s authors – the authors whose estimates for the previous version of the bill were discredited by every independent analysis conducted.

In addition to changing the funding formulas, in an attempt to sway more conservative Senators, the bill removes, even more, consumer protections.

Below we’ll take a brief look at the regulatory changes, then a look at the funding.

Regulatory Changes 

• States would have more flexibility to set many of their own health insurance standards without getting waivers from the federal government (e.g., allow insurers to not cover some of the essential health benefits)
• States could set their own limits on out-of-pocket costs that differ from the federal limits
• States could allow insurers to set higher premiums based on a person’s health status

Here are additional observations from Larry Levitt, Senior VP, Kaiser Family Foundation (Source: https://twitter.com/larry_levitt/status/912135675159314437)

• States no longer have to submit waivers of insurance rules under the revised Graham-Cassidy bill. They just have to describe their plans.
• Under the revised Graham-Cassidy bill, states decide how much insurers can charge people who are sick, required benefits, and cost-sharing.
• Under the revised Graham-Cassidy bill, states can alter the federal cap on patient out-of-pocket costs, allowing for bare bones insurance.
• Remember the single risk pool requirement? The revised Graham-Cassidy bill allows multiple risk pools.
• If there was any question about Graham-Cassidy's removal of federal protections for pre-existing conditions, this new draft is quite clear.

Funding

• Revises formula that determines the allotment of funds, does not change the total amount spent
• The new CMS table (that shows the increased funding for Maine) does not include effects of Medicaid per capita cap. The state-by-state estimates are on subsidies/expansion vs. block grants, they don’t factor in Medicaid per capita caps (a cut previously estimated at $1 trillion)*.
• Even if slightly more dollars for now (for a few select states), this ignores the cliff in 2026 when the block grant goes away and all states would see deep funding cuts
• Most states that appear to “win” in the near term only do so because the bill assumes they won’t expand Medicaid.

Conclusion

As I said in the title, they managed to take what was already the worst of the repeal and replace bills and make it even worse.  The earlier version of the bill was rejected by national groups representing physicians, hospitals and insurers. In an unprecedented move, six organizations, including the American Medical Association and the American Hospital Association, issued a joint statement urging the Senate to reject the measure.

Don’t be fooled by headlines saying Maine will get more money – First, it’s definitely not true in the long run and probably not true in the short run.  And second, this bill essentially eliminates the consumer protections implemented by the ACA and:

“This revised bill is tantamount to federal deregulation of the insurance market,” Larry Levitt of Kaiser Family Foundation said. “If there were any doubt that people with pre-existing [conditions] are at risk of being priced out of individual insurance, this bill removes them.”

Remember, this bill is part of the reconciliation process – the CBO and Parliamentarian must weigh in before a vote – it’s unclear how that will happen before Saturday (Sept. 30 when the reconciliation measure expires).

A bad bill and a bad process – September 30 and the end of this chapter of repeal and replace can’t come soon enough.

Sources:

• Senators Revise Health Bill in Last-Ditch Effort to Win Votes (NY Times)
• Graham, Cassidy revise Obamacare repeal bill, appealing to holdouts (Politico)
• Here's the new Graham-Cassidy bill (Axios)

*” Apart from the block grant, all states would experience deep and growing cuts to their Medicaid programs for children and families, pregnant women, seniors, and people with disabilities. Like prior Republican repeal bills, Cassidy-Graham would radically restructure financing for all of Medicaid. Starting in 2020, Cassidy-Graham would replace the existing federal-state financial partnership, under which the federal government pays a fixed percentage of a state’s Medicaid costs, with capped federal Medicaid funding at a set amount per beneficiary, irrespective of states’ actual costs. Cassidy-Graham would annually adjust these cap amounts at a rate that’s lower than projected growth in state Medicaid costs per beneficiary, forcing every state to make large and growing Medicaid cuts over time. The federal cut to Medicaid spending would total $1.1 trillion between 2020 and 2036 (and that doesn’t count the end of the ACA’s Medicaid expansion), the independent consulting firm Avalere estimated.” Source: https://www.cbpp.org/blog/no-state-wins-under-cassidy-graham-despite-its-funding-redistribution