Republicans have unveiled their brave new strategy for fixing the U.S. health-care system: Make someone else deal with it.
Of all the god-awful Obamacare-repeal-and-replace plans that Republicans have proposed, Cassidy-Graham might be the god-awfulest. It’s definitely the most cowardly. Republicans spent nine months fighting over how to repeal Obamacare without shafting the poor and enraging voters, and they failed.
So instead they’re passing the buck.
Here’s how the bill, named for Republican Sens. Bill Cassidy (La.) and Lindsey O. Graham (S.C.), works.
It would eliminate the Obamacare individual market subsidies, which help low- and middle-income people buy insurance. It would also repeal Obamacare’s Medicaid expansion money. After an enormous across-the-board cut to federal health spending, Congress would give each state a block grant.
Every state would then have to create its own entirely new health insurance program, from scratch, by 2020.
Then, in 2027, the block-grant funding ends entirely.
Because hey, if Congress, with so many experts and resources at its disposal, can’t figure it out, then surely some part-time state lawmakers can. All our health-care problems will be solved once we unleash the brain trust that is the Kansas legislature.
All this means fewer people would be insured, since states will be forced to do less with less. We don’t yet have an estimate for how many Americans would lose coverage, though; the Senate plans to vote on the bill next week, conveniently before the Congressional Budget Office has time to put together a full score.
An increase in uninsured rates isn’t the only easily foreseeable problem with this proposal. Premium prices are likely to spike, too.
That’s because Cassidy-Graham eliminates the Obamacare requirement that everyone have health insurance. It also doesn’t replace this mandate with anything to incentivize healthy people to get coverage.
As a result, the relatively sick will buy insurance at higher rates than the relatively healthy, pushing up premiums and thereby driving more relatively healthy people out of insurance markets, further driving up premiums, and so on. The dreaded “death spiral,” in other words.
To hold premiums down, states would probably be tempted to scale back benefit requirements and encourage the sale of cheap but nearly worthless insurance plans. These are sometimes called “mini-med” or “buffalo policies,” so nicknamed because they pretty much pay off only if you get run over by a herd of buffalo.
Regrettably, Cassidy-Graham empowers states to shred these consumer safeguards: Unlike Obamacare, the proposal does not protect people with preexisting conditions; has no mandatory coverage of cancer, prescription drugs, maternity care or other “essential health benefits”; and does not prohibit lifetime benefit caps.
“States would be given an enormous amount of money with no strings attached,” says Larry Levitt, senior vice president at the Kaiser Family Foundation.
“No strings attached” is a bit of an understatement. Cassidy-Graham doesn’t even require states to devote a single dollar of their block grants to insuring poor people. In fact, states could just use the grants to substitute for existing programs, Levitt says, allowing state funds to be directed to other purposes.
To hear Republican senators tell it, of course, this isn’t about forcing governors to make decisions that Congress is too gutless to make itself.
No. It’s about federalism!
States, those laboratories of democracy, are better suited to craft insurance policies — which are, at their core, boring financial contracts — narrowly tailored to their own unique state needs.
Which is nonsense.
What, people in Tennessee don’t get cancer? People in Hawaii don’t give birth or have heart attacks? Adverse selection isn’t a problem in Alaska?
Generally speaking, diseases and laws of economics don’t recognize state borders.
What’s more, under Obamacare, states already have the flexibility to experiment and innovate. Under current law, states can apply for waivers if they wish to adapt their regulations to local conditions.
But the Affordable Care Act says they can do so only if they adhere to basic consumer protections and a minimum level of quality. Cassidy-Graham includes vague language about how states should offer “adequate and affordable health insurance coverage for individuals with pre-existing conditions,” but there’s zero enforcement mechanism to guarantee they do so.
It’s no wonder that nearly every major stakeholder, from the American Medical Association to the March of Dimes, has come out against this lily-livered bill. Cassidy-Graham is an abdication not only of any responsibility to the poor and the sick but also of congressional leadership more generally.
When it comes down to it, Senate Republicans aren’t trying to improve the health-care system. They’re trying to duck responsibility when they make it worse.