Much is at stake for low-income Americans and states in the Graham-Cassidy proposal. The recent debate over the [American Health Care Act] and the [Better Care Reconciliation Act] has shown the difficulty of making major changes that affect coverage for over 70 million Americans and reduce federal funding for Medicaid. Medicaid has broad support and majorities across political parties say Medicaid is working well. More than half of the states have a strong stake in continuing the ACA Medicaid expansion as it has provided coverage to millions of low-income residents, reduced the uninsured and produced net fiscal benefits to states. Graham-Cassidy prohibits states from using Medicaid to provide coverage to childless adults. With regard to Medicaid financing changes, caps on federal funding could shift costs to states and result in less fiscal flexibility for states. States with challenging demographics (like an aging population), high health care needs (like those hardest hit by the opioid epidemic), high cost markets or states that operate efficient programs may have the hardest time responding to federal caps on Medicaid spending. Faced with substantially reduced federal funding, states would face difficult choices: raise revenue, reduce spending in other areas, or cut Medicaid provider payments, optional benefits, and/or optional coverage groups.
Over 2020 to 2026, the block grant would provide states with $81.6 billion less in federal funding than would be available under current law, a reduction of 6.4 percent. In 2026, national funding for the block grant is 8.9 percent below current law spending projections.Most states would receive less funding under the block grant than under current law. … 32 states would receive less federal funding in 2020 under the unadjusted amount of the block grant. By 2026, some states fare better, but the majority (27 states) continue to face a loss of federal funding. Over the 2020 to 2026 period, 29 states receive less in federal funding with an average reduction of 19 percent.In some states, the loss of federal funding is significantly higher, reflecting the disparate impact of the Graham-Cassidy proposal on states that have expanded Medicaid and/or generally have higher-cost care. States such as Alaska, Connecticut, Delaware, New Hampshire, New Mexico, New York, Oregon, Vermont, and Washington would see reductions of 25 percent or more over the 2020 to 2026 period under the Graham-Cassidy unadjusted allotments relative to current law.