With just 17 days left for Republicans to repeal the Affordable Care Act on a party-line vote, a quartet of GOP senators on Wednesday rolled out a plan to devolve federal health care spending into state-by-state block grants — legislation that South Carolina Sen. Lindsey O. Graham described as conservatives’ last shot at reform.
“It should have been our first bill to repeal and replace Obamacare, but it is now our last,” Graham said at a morning news conference. “To those in the Republican Party who feel like we have not fought as hard as we could, you’re right.”
The Graham-Cassidy-Heller-Johnson bill, named for co-sponsors Graham, Bill Cassidy (R-La.), Dean Heller (R-Nev.), and Ron Johnson (R-Wis.), would turn the billions of dollars spent on the ACA’s Medicaid expansion, tax credits and subsidies into grants managed by each state.
The bill represents a fundamentally different approach to overturning much of the sprawling 2010 health-care law than other measures Senate Republicans have attempted — and failed to achieve — this year.
It would leave in place most of the financial props that support the ACA, eliminating only a tax on medical devices. At the same time, it does not attempt to replace the current law’s policies with more conservative federal approaches, instead allowing each state to define its own rules for health plans that may be sold to residents and the help consumers should receive to afford that insurance.
“It’s a massive devolution of federal money and responsibility to states, on a scale I don’t think we’ve ever seen,” said Larry Levitt, senior vice president of the Kaiser Family Foundation. “Over time, it’s less federal money than is being spent now on health care, but it’s still a huge pot of money available to states with very few strings attached.”
While maintaining the ACA’s taxes, the proposal would repeal many of the law’s features disliked by Republicans, including the requirements that most Americans carry insurance and that large employers offer health coverage. It would allow states to waive most of the law’s insurance regulation but continue its ban on insurers refusing to cover people with preexisting medical conditions.
The plan would end the premium tax credits that the ACA provides to more than 80 percent of the approximately 10 million Americans who currently have health plans through marketplaces created under the law. And it would eliminate cost-sharing discounts the law provides lower-income consumers with marketplace plans to help them afford deductibles and other other-of-pocket expenses. State could decide whether to create new forms of financial help for buying insurance.
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The bill’s main components would start in 2020, and the funding it envisions would last until 2026, limited by the 10-year budget window. The amount of money each state would receive as a block grant would hinge on how many residents fall roughly within the income groups eligible for Medicaid under an expansion of the program that about three-fifths of the states have adopted under the ACA — people with incomes of up to 138 percent of the federal poverty level.
But the block grant could be spent on a variety of health-care purposes, not just to help lower-income people gain coverage. States would decide whether to preserve, or begin, their Medicaid expansion.
What’s uncertain is how the bill could beat the buzzer — the end of the budget reconciliation reconstructions that Republicans hoped they could use to repeal most of the ACA with just 50 votes, plus the tiebreaking support of Vice President Pence.
The GOP's anti-Obamacare push, which has been on hold since three Republican senators blocked a "skinny repeal" bill on July 28, appeared to end in August. Over the long summer recess, both party leaders and outside groups began talking and buying TV ads to promote tax cuts, the president's next domestic agenda item. The Koch-backed Americans for Prosperity, which had organized years of repeal rallies, spent August working to build momentum on tax reform.
“What has been proposed isn’t actually repeal and replace,” said Dan Holler, the communications director at Heritage Action, another of the major conservative pro-repeal groups. “I’m not convinced that the solution here is to unveil another sweeping bill ahead of a tight deadline. That hasn’t worked for anyone so far.”
On Sept. 1, the Senate parliamentarian ruled that the end of the fiscal year on Sept. 30 would mean the end of the party’s ability to pass a bill with a simple majority. Graham and Cassidy, the main sponsors of the latest plan, kicked into overdrive, submitting text to the Congressional Budget Office last week and arguing that the bulk of their idea had already been vetted when Cassidy and Sen. Susan Collins (R-Maine) floated a separate proposal.
“You play with the hand that’s dealt,” Cassidy said. “The heart and soul of what we’re doing here was in Cassidy-Collins. I went to 10, maybe 11, Democratic senators, and all of them said they couldn’t collaborate with us.”
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The senators say they could fit hearings into the tight schedule, and they acknowledge those sessions would matter because of the reasons that “skinny repeal” died. Sen. John McCain (R-Ariz.), who cast the deciding vote against it, argued that both parties needed to return to regular order. The new bill’s backers said they could wrangle the support they needed, the score they needed and move through the committee process before the deadline.
“I’m chairman of Homeland Security. If either the Finance Committee or HELP committee won’t hold a hearing, I’ll notice one this afternoon,” Johnson said.
Johnson and Graham also suggested that conservative governors could build momentum for the bill, if the White House worked on them to endorse it and explained how their states would benefit from block grants.
“The president said, if you get 20 governors on board, he’ll stand with them,” said Graham. “Make some calls; help us get to 20.”
The struggle to get most Republican governors on board with the bill was telling. Even before the collapse of the first repeal push, moderate Republican governors like Ohio’s John Kasich and Nevada’s Brian Sandoval were urging Congress to move on and pass compromise legislation that would fully fund the ACA’s tax subsidies. Asked if his governor backed his bill, Heller said that it was a “work in progress.”
Predicted Levitt: “If this bill passed, it would get Congress off the hot seat of figuring out how to deal with health care — but unleash 50 debates in state capitals around the country.”
Graham, who described a political crisis for Republicans if they did not act, said that the block grants would at least end the threat of further national health insurance reform. He repeatedly described the bill not just as an alternative to the status quo, but as a way to head off the Medicare for All bill being proposed Wednesday by Sen. Bernie Sanders (I-Vt.) and 16 Democratic colleagues.
“This is the only thing standing between you and single-payer health care,” said Graham.