“I’m sorry he doesn’t understand. Under Graham-Cassidy-Heller-Johnson, more people will have coverage.”
— Sen. Bill Cassidy (R-La.), interviewed on CNN’s “New Day,” Sept. 20, 2017
Late-night host Jimmy Kimmel attacked Cassidy over the health-care repeal plan crafted by Cassidy and Sens. Lindsey O. Graham (R-S.C.), Dean Heller (R-Nev.) and Ron Johnson (R-Wis.) as a last-ditch effort to replace the Affordable Care Act. Kimmel asserted, among other things, that the proposed law “will kick about 30 million Americans off insurance.”
Firing back, Cassidy flatly stated that “more people will have coverage. … There are more people who will be covered through this bill than under the status quo.”
As always with health-care policy, this is complicated stuff. But let’s dig through the code words and see whether Cassidy’s claim holds up to scrutiny.
Starting in 2020, the Cassidy-Graham bill would reallocate funding now devoted to the Affordable Care Act exchanges and the law’s expansion of Medicaid and give it to states in the form of block grants. States, in theory, would have great flexibility to create their own health-care systems, though only two years to do it.
The block grants would increase according to an index lower than general inflation — not according to how many people are covered or what diseases they have — so the total pot would grow more slowly than under current law. All funding would be terminated by 2027, unless Congress acted at the time to continue it.
One of the big problems faced by previous GOP repeal plans was scorekeeping by the Congressional Budget Office, which assessed how many people were projected to have health insurance coverage under the proposal compared to current law. Invariably, tens of millions fewer people were projected to have health insurance.
Presumably, this is where Kimmel gets his 30 million figure — from previous CBO scores of eliminating the ACA without a real replacement. But he repeated “kicked off” language, often used by Democrats, that The Fact Checker has previously found to be misleading. The CBO has a lot of faith in the power of the individual mandate, so it negatively scored proposals that eliminated the mandate.
Many of the people who would be uninsured, at least initially, would choose not to have insurance, because they had decided to obtain coverage only to avoid a penalty. So they are not being kicked off but leaving of their own accord.
Still, CBO has generally estimated that just one year after the individual and employer mandates are repealed, 15 million to 18 million fewer Americans would have health insurance. So that would be a steep hole that Cassidy-Graham would have to climb out of as its provisions were implemented.
The Cassidy-Graham bill has not been scored by the CBO, which says it is unlikely to produce a comprehensive report before Sept. 30 — when Senate rules mean Republicans can no longer pass a bill with just a simple majority.
So how does Cassidy know that “more people will have coverage” under his bill, even though federal health-care funding will be reduced significantly in many states compared with current law?
Cassidy spokesman Ty Bofferding said the United States spends more than twice as much per person as countries in Western Europe — all of which have universal health-care systems — so it was reasonable to believe better outcomes were possible with fewer dollars.
“We expect when states are free of structural regulation, the American people will see innovative ideas,” he said. “No CBO coverage score is available for the bill yet; however, this legislation has far more enrollment incentives than previous repeal-and-replace attempts, so we expect improved coverage.”
Given the spending reductions in the bill, many health-care experts found this logic to be highly dubious. Yet no credible analyst has been willing to venture an estimate on coverage because no one knows how states would react.
For instance, the respected health-care consultant Avalere Health concluded that California would face a 13 percent shortfall ($78 billion between 2020 and 2026) under Cassidy-Graham compared to current law. But in theory, the state could decide to create a single-payer system that could cover everyone, so that would certainly increase coverage. In fact, the trade group for insurance companies — America’s Health Insurance Plans — opposes the bill in part because it could “build a bridge to single-payer systems.”
The bill also has incentives for states to focus on the U.S. population with income at 50 to 138 percent of the federal poverty line ($24,600 for a family of four), as block grant funding would be allocated according to the level of insurance coverage in that income range. States might then alter essential benefit rules to offer skimpy low-premium plans for everyone else in the individual insurance market. No one knows if such plans would meet the CBO’s definition of “comprehensive coverage,” but if they did, then in theory it could lead more people to buy such insurance.
But at the same time, other states may just take the federal money and use it to fund existing state health programs. That would do little to expand coverage.
“It is a difficult analysis, given that it is hard to predict how states will respond to the new flexibility afforded them in the bill,” said Caroline Pearson, senior vice president of Avalere. “Overall, we do believe that lower federal funding will reduce coverage nationally, but specific impacts will vary by state.”
Similarly, Manatt Health, a unit of a national law firm that advises states on health-care issues, concluded that “the legislation could create significant fiscal and political pressure on state policymakers” as the federal funds were reduced over time. Only 16 states would initially experience an increase in funding under the bill, according to the Avalere analysis, while over time a per capita cap in Medicaid funding would begin to squeeze, especially in the second decade after passage.
“We struggled mightily with the challenge of estimating coverage losses and ultimately concluded it was impossible to do, at least to the standards we hold ourselves to in our work,” Drew Altman, president of the Kaiser Family Foundation, said in an email. The coverage levels “will quite literally depend on what each of the 50 states do (and don’t do) with the block grants they would receive.”
But he added: “I think it’s a very high bar to argue that federal funding to states will be cut by $160 billion (other estimates are higher) between 2020 and 2026 (forget whether it ends in 2027 or not) and coverage will stay the same or increase. Nobel Prize in economics for whoever pulls that one off.”
The Pinocchio Test
Regular readers of The Fact Checker know that the burden of proof falls on the person making the claim. Cassidy has provided little evidence to support his claim of more coverage, except that innovation would flourish and help bring down costs and expand coverage. That’s certainly possible, but it would be more plausible if his proposal did not slash funding to such an extent.
Kimmel’s claim that 30 million fewer Americans will have insurance may be a high-end estimate. But already, in 2019, CBO calculations suggest at least 15 million fewer Americans would have insurance once the individual and employer mandates are repealed. Much of that decline might be by choice, but Cassidy insists the gap will be filled and then exceeded in 10 years. Unlike Cassidy, no prominent health-care analyst is willing to venture a guess on coverage levels — but the consensus is that his funding formula makes his claim all but impossible to achieve.
Given the lack of coverage estimates by the CBO or other health-care experts, Cassidy’s claim does not quite rise to Four Pinocchios. But it certainly merits a Three.
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