Graham-Cassidy Healthcare Bill: Under Guise of Federalism, Many Left Behind

Last week, Senators Lindsey Graham and Bill Cassidy proposed a health care bill that they said would give people self-determination over health care. When control of health care policy is shifted to states, they argued, policies will be implemented more effectively. By upholding the conservative tenet that money is most effective in the hands of individual consumers and their state officials, health care spending cuts will be met with increased efficiency, and consumers will benefit from individually tailored coverage and care. As Cassidy put it during a CNN town hall on Monday night, “If the state has the power it can be more responsive to those who live in the state… if there is a choice between you and the federal government, our plan chooses you.” The thing is, states don’t have the power. So you end up lost in the mix, and Cassidy’s bill doesn’t actually end up being health care.

Cartoon by Lo Wall

The Graham-Cassidy bill ends Obamacare’s private care subsidies for low- and middle-income Americans and its Medicaid expansion program, along with the individual insurance mandate (the requirement that everyone has health insurance) and minimum coverage standards. Funding is distributed to states as a block grant, a lump sum of money that can be used for health-related policies as the state sees fit. Regulations on what those policies look like are loose, and there is no requirement that low-income populations receive the bulk of the benefit—money could, for example, be spent on “stabilizing premiums,” “promoting state health insurance market participation,” or go directly to healthcare providers. Companies are also not required to accept patients with pre-existing conditions. They can supply stingy plans with high out-of-pocket costs, and they are not required to cover birth control. There is no guarantee that an individual can purchase health insurance if they wanted to, depending on what those funds are used for. Under Graham-Cassidy, it is perfectly fine and legal for a low-income family to go without health insurance because they cannot afford it. This is drastically different from both the Democratic assumption that health insurance is a basic right and the Republican assertion that it be a choice—under Graham-Cassidy, even choosing health insurance is a privilege.

Not only do states have more leeway in appropriating funds—and in who they cover and what they charge—they also have less money to allocate. By 2020, the Graham-Cassidy bill would spend $20 billion less than the Affordable Care Act (ACA) would on expanding coverage; by 2026, that gap would increase to $83 billion, or a 34- percent cut. Because the distribution of funding is based not on specific program implementation but on a state-by-state funding formula, those cuts would be spread unevenly across states. It essentially redirects money from states that applied for Medicaid expansion and had aggressive health care policies to states that took Obamacare at face value, with little interest in expanding it. As such, it disproportionately hurts states like California and New York, which will watch their relatively successful health care programs run dry of funding, while states that receive increased funding are under no obligation to use it in the interest of their most vulnerable. Rather than bringing struggling states’ programs up, it tears successful programs down. As a result, an estimated 21 million people—the same Americans Cassidy promised his plan would put first—will lose coverage entirely by 2020. And states, which were promised ultimate self-determination, will often find themselves unable to foot the bill.

Graham-Cassidy isn’t expected to pass—Senators John McCain, Rand Paul, and Susan Collins (and hopefully Lisa Murkowski, by the time of this publication) have all outwardly opposed the bill, and the Republican party needs 50 of its 52 Senators to vote yes. After this week, any repeal attempts will require 60, not 50, votes to pass. For the moment, then, as so many news headlines have emphasized, the repeal of Obamacare looks dead. But this proposal highlights how dissociated our evaluation of policy has become.

The difference between Graham-Cassidy and the other repeal-and-replace bills for which Republicans have advocated (and failed to pass) is that Graham-Cassidy claims to have some ideological consistency besides an unabashed effort to undo a demonized Obamacare. Again, this is supposed to be about states’ rights and power-to-the-people. Graham and Cassidy are supposed to be moderate Republicans who respect the Senate process. That this supposed ideological consistency thinly covers a bill which really boils down to a cut-spending-and-deal-with-it approach to health insurance only further undermines the credibility of a Republican party realizing it spent the past eight years so focused on what shouldn’t be done they forgot to think about what should.

It’s possible to conceive of health care within a framework of individual liberty and still conclude that health care is a right (and therefore, affordable health insurance is a necessity). You could imagine a system in which                        states   have the option to either keep Medicaid expansion or receive a block grant upon submission of an alternate policy that meets some federal standard. If states had to prove that their policies would maximize coverage—and then could receive enough funding to implement them well—a state-centered approach to health insurance need not be disastrous. The Graham-Cassidy bill, then, is not only ineffective at covering people but is ineffective at being Republican—as are the Congressional Republicans who supported the bill in full knowledge of its consequences.

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