The Senate’s last-gasp Obamacare repeal spans 140 pages — a beach read compared to the mammoth law it would replace — as Republicans rush to hand policy choices to the states, letting governors decide whether to mandate coverage, redefine “essential benefits” or tap fixed grants to combat the opioids epidemic.
Size matters when it comes to health care reform, according to Republicans who stacked the 1,000-page Affordable Care Act on their desks in protest in 2009 and wheeled around its reams of regulations on hand trucks.
It’s an old trick, one that President Ronald Reagan employed by hoisting a 14-pound budget resolution during his 1988 address to Congress to symbolize last-minute deals that no one had read.
Sen. Rand Paul, Kentucky Republican, says the repeal gambit is poorly understood and keeps too much of President Obama’s overhaul — despite its skinny packaging. He is a firm “no” vote before next week’s floor showdown.
Yet bill sponsors say GOP senators should be enticed by the plan, which streamlines Obamacare’s layered approach by pooling together money that pays for its expansion of Medicaid and subsidies on its insurance portals, before divvying it back to the states in the form of block grants.
“Obamacare was about consolidating money, power and control in Washington. To do so, they wrote page upon page of rule and regulation into law. It was a Washington-knows-best-attitude put into practice,” said Kevin Bishop, spokesman for Sen. Lindsey Graham, the South Carolina Republican who co-sponsored the latest repeal with Sen. Bill Cassidy of Louisiana.
“Graham-Cassidy goes the opposite direction,” Mr. Bishop said.
States would starting getting their share of the $146 billion pot in 2020 and tailor it to their own health programs, while kicking in 3 percent of the block grant amount from their own funds. That amount would rise to 5 percent by 2026.
States might set up high-risk pools to separate out their sickest customers, while some might subsidize coverage, pick up out-of-pocket costs or directly fund treatment. Others might set aside “reinsurance” funds to blunt the cost of really sick patients so others don’t pay more.
The bill axes the most contentious part of Obamacare, the individual mandate requiring Americans to get covered or pay a tax. It leaves it up to states, if they so choose, to find a different way to spur people into coverage.
States can tap their block grant funding to combat the opioids problem, though the bill itself doesn’t include the extra cash that GOP senators demanded earlier this year.
The bill blocks Planned Parenthood from receiving Medicaid dollars for a year, a long-standing goal for conservatives who want to punish the organization for its abortion practice, while thwarting states from using block grant dollars to fund insurance that covers the procedure.
It lets anyone buy “catastrophic coverage” in the individual market in 2019 — instead of just those under age 30 — and permits states to impose work requirements on people who receive Medicaid.
Some governors aren’t happy that cutting legislative pages and fiscal fat in Washington also means getting a skinnier wad of cash to cover their residents. Plus, the bill also gives them two short years to revamp health care. Obamacare took four years to implement, and still suffered from launch difficulties.
“States are always looking for more discretion and flexibility, but this could end up being way more than they’ve bargained for,” said Larry Levitt, senior vice president at the Kaiser Family Foundation. “Graham-Cassidy would take Congress off the hot seat of trying to figure out how to reform health insurance and put states on it.”
The bill repeals Obamacare’s 2.3 percent tax on medical device sales — some Democrats hated that too — but retains its levies on high earners, health insurers and others to pay for its block grants.
States that expanded their Medicaid programs will see less federal funding over time, while many that balked at expansion, arguing they couldn’t afford their 10-percent share of funding, should win out in the coming decade.
Beyond eliminating the expansion, the plan sends states a fixed amount of Medicaid money per enrollee starting in 2020, and later on further limits annual increases in funding.
“Taken together, the per-capita caps and the envisioned block grant would constitute the largest intergovernmental transfer of financial risk from the federal government to the states in our country’s history,” the National Association of Medicaid Directors said in a statement on the Graham-Cassidy plan.
Avalere Health, a D.C.-based consultancy, said the plan would cut federal Medicaid funding to the states by $713 billion through 2026.
A crucial holdout — Sen. Lisa Murkowski of Alaska — says she is scrubbing the language and formulas to see how the bill would affect her state.
One provision in the bill appears to benefit places like Alaska, which is physically large but has few people and suffers from unusually high health costs. The bill says “low-density” areas, defined as having a population density of less than 15 individuals per square mile, can opt out of the Medicaid per capita limit if they expect their block of funding under the Graham-Cassidy design to drop or stay level by 2026.
States could obtain waivers that redefine the slate of benefits that insurers must cover under Obamacare and duck rules requiring insurers to charge healthy and sick customers the same amount. However, they must specify how they plan to provide “adequate and affordable” coverage to people with pre-existing conditions.
“In short, we don’t really know how this will be defined and what kind of protection it will offer patients in states that decide to pursue aggressive waivers and change most of the ACA’s market rules,” said Chris Sloan, a senior manager at Avalere Health.
High-profile debate over the provision is another hurdle for Republicans scrambling to pin down votes, and who will hold a hearing on the bill Monday and expect to get a preliminary analysis from the Congressional Budget Office this week with top-line fiscal numbers, though not a full report on potential coverage losses from funding cuts.
Democrats say Republicans are jamming their bill through after years of ribbing House Minority Leader Nancy Pelosi, who as speaker famously said Congress had to pass Obamacare to see what’s in it.
Mr. Graham and Mr. Cassidy insist they’ve crafted a better, simpler approach, though some GOP senators are still shirking the details, saying they must act on repeal before a Sept. 30 deadline to avoid a Democratic filibuster under 2017 budget rules.
“You know, I could maybe give you 10 reasons why this bill shouldn’t be considered,” Republican Sen. Chuck Grassley told home-state reporters in Iowa last week. “But Republicans campaigned on this so often that you have a responsibility to carry out what you said in the campaign. That’s pretty much as much of a reason as the substance of the bill.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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