Republicans Think They Can Pull It Off with the ACA and the Budget

On September 7, I pointed out Republicans are preparing Another Assault on the PPACA/ACA in 2017. Republican senators Lindsey Graham S.C. and Bill Cassidy LA are making a last stand in an effort to repeal and replace the ACA by “proposing legislation doing away with many of the subsidies and mandates of the 2010 law. Instead, the Graham – Cassidy Bill would provide block grants to the states to help individuals pay for health coverage.

Graham taking it out of context what Obama said on keeping company healthcare insurance, rolls out his own version of the same except it is mocking Obama. “You can keep the ACA;” however, Republican legislation would make it virtually impossible for dozens of states to continue operating Obamacare without large amounts of state funding. In the short term, the law is designed to penalize states who embraced the ACA and reward states not expanding Medicaid. The legislation stops all of the ACA by repealing the subsidies and substituting their own budgetary subsidies as required under Reconciliation. As Slate’s Jordan Weissmann says, “it’s a bit like walking into somebody’s house, lighting the whole ground floor on fire and telling them, Hey, you can keep living here — if you like it.” It is political revenge being vent on constituents the same as Republicans blocking the Risk Corridor Programs and Trump’s threats to block CSR subsidies applied to premiums by healthcare insurance companies. Some detail on the Republican plan and the impact:

• The new plan favors poorer, older, and less populated parts of the country utilizing its own formula for block grants instead of using the ACA formula to fund the grants. The Graham – Cassidy plan shifts spending to the large states which expanded Medicaid (California and New York) to less populated states refusing to expand Medicaid (Mississippi and Alabama). Some non-expansion states like North Carolina and Florida would also will see less funding as much of the population benefited from premium subsidies. As a whole, the Republican Graham-Cassidy plan punishes states getting more of their residents insured through the ACA.

• The 2% inflation planned increases of block grants would be far less than the inflationary cost of healthcare or insurance. The impact either leaves states to back fill or constituents to make up the difference. The Center on Budget and Policy Priorities states the block grants would result in a 34 percent spending cut in comparison to the ACA by 2026. Nine states; California, Connecticut, Delaware, Florida, Massachusetts, New Jersey, New York, North Carolina, and Virginia would see their federal health-care funding cut in half under the block grant system when compared to the funding received from Obamacare’s Medicaid expansion and increased subsidy spending.

• Graham – Cassidy also implements a capita cap which cuts Medicaid expansion state funding by $180 billion over 10 years. The resulting cuts would increase each year reaching $41 billion annually by 2026. A 9 percent cut to total federal Medicaid spending for seniors, people with disabilities, families with children, and other adults (outside of the ACA’s Medicaid expansion) comes into play by 2026. The per capita spending cuts are expected to grow from a 26% cut to Medicaid funding in 2026 to 35% in 2036 according to CBO calculations.

• States will may also be able to eliminate such benefits as maternity and mental healthcare from their plans, impose annual and lifetime limits, and dramatically raise deductibles and other out-of-pocket costs. According to the CBO, states having approximately 50% of the population would take up these damaging waivers. As if this is not enough, Graham and Cassidy are also considering the “Cruz amendment,” which allows insurers to sharply increase premiums to people with pre-existing conditions or deny them coverage altogether. Now whether or not these addition benefit eliminations are budget related and qualify under Reconciliation is something I would wonder about as they do not appear to be budget related.

There is enough time for Republicans to change the ACA and also achieve a new budget going in 2018 (October 1) with Reconciliation instructions for Tax Reform. The Republicans might burn some midnight oil and have short weekends; but, it can be done if they wish to further deny President Obama a legacy and support Trump’s skewed views on race and Obama.

As far as McCain? “Sen. John McCain told the Hill on September 6th, he would support a plan offered by Sens. Lindsey Graham (R-SC) and Bill Cassidy (R-LA) to repeal the Affordable Care Act. And McCain later released a statement clarifying his support for the bill in concept, but hasn’t seen a final product.

“While I support the concept of the Graham-Cassidy proposal, I want to see the final legislation and understand its impact on the state of Arizona before taking a position,”

As far as Pelosi and Schumer offering up a solution to the national debt and making it easy for Trump to offer hurricane Harvey Relief. The Democrat relief gesture was humane; however, McConnell says he has a counter measure to the maneuver by Democrats to renegotiate the National Debt in December. Republicans are planning to stick it to Democrats and “all” constituents with a repeal of the ACA and by killing a large percentage of the subsidies. In the end if the repeal does happen, Pelosi and Schumer’s kind hearted display of bi-partisanship will be recognized as the dumbest move Democrats have ever made. They should have waited a week or so to extend the help.

Dan’s comment in an email: “We will see soon enough…I hope you are not prescient.” I hope I am wrong. It is too close to call.

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