The Republican dream of repealing Obamacare isn’t ready to head to the morgue just yet. After previous efforts died in the Senate earlier this summer, Obamacare repeal receded, only to storm back this week. Republicans are scrambling to pass a last-ditch effort before a September 30 deadline. And they might be close to reaching the 50 votes they need to pass a bill.
But they’re still not quite there. Sens. Lisa Murkowski (R-Alaska) and Susan Collins (R-Maine) were steadfast opponents of the earlier proposals, and there’s nothing in the new bill that would solve the problems they cited in the past. Rand Paul (R-Ky.) hasn’t minced words in discussing his hatred for the bill. And John McCain (R-Ariz.) has still been talking up his desire to stick to standard Senate procedure rather than rush a bill through—although his commitment to regular order might not trump his commitment to his friend Lindsey Graham (R-S.C.), who co-authored the bill.
In other words, Republican leaders need to change just one or two minds before they lose their ability to pass a bill without facing a Democratic filibuster in 10 days.
The newest version of Trumpcare is, in many ways, even more extreme than the previous Republican proposals. The bill, called Graham-Cassidy after the pair of Republicans who introduced it, would allow insurance companies to charge higher rates for people with preexisting conditions. It would bring back junk plans that don’t offer the coverage people expect when they go to the doctor. It would end Medicaid’s open-ended promise to cover low-income and disabled Americans, imposing massive future cuts that would force states either to raise taxes sharply or to kick millions of people off Medicaid. And it would cut off federal funding for Planned Parenthood for a year, decimating the country’s largest women’s health provider.
But we still don’t know the bill’s full ramifications, and we won’t know them before the Senate would need to vote on it. The Congressional Budget Office announced Monday that it will look at how Graham-Cassidy affects the deficit and release a report next week, but it won’t have enough time to analyze how many people would lose insurance and how premiums would change under the plan. If Republicans proceed to a vote next week, they’ll break Senate norms to vote for a bill that no one has had time to properly analyze.
While we can’t say exactly what would happen if Graham-Cassidy becomes law, there are a few things we do know. Allow us to demystify this legislation that Republicans are trying to ram through Congress with scant public attention.
So, what’s this bill do to Obamacare?
Graham-Cassidy would ditch almost all of Obamacare’s rules and regulations, including the individual mandate, while keeping the taxes from the law and turning that money into block grants to the states. It would continue barring insurance companies from turning people away because of preexisting conditions—but it would allow insurers to charge higher rates to people who have current or past medical conditions. In other words, while it wouldn’t cause sick people to be kicked off their insurance plans, it could make insurance unaffordable for them.
States, meanwhile, could opt out of requiring insurance companies to cover a full package of essential benefits, allowing them to return to the pre-Obamacare days when they sold plans that didn’t include key categories such as maternity care and mental health. In that sense, the bill is similar to the one that passed the House earlier this year, which, according to the CBO, would have left half of all Americans living in places where insurers charged higher rates for people with preexisting conditions or excluded essential health benefits from the individual market.
Between 2020 and 2026, the block grants would offer states $239 billion less than would be spent under the current system, according to the left-leaning Center for Budget and Policy Priorities. After that, the money would basically vanish, making the new legislation essentially a full repeal of Obamacare. Republicans have hinted that they wouldn’t want that to happen and they’d just renew the funding at that point. But the decision by the bill’s authors not to make the funding permanent hints at their true intentions, and Senate rules would force senators to come up with a whole new funding mechanism in 2026 if they wanted to maintain the block grants.
As the Kaiser Family Foundation’s Larry Levitt has pointed out, this would cause massive headaches for states. First, states would need to come up with their own plans to using the block-grant funds starting in 2020. But they’d be crafting those ideas with the knowledge that federal funding might drop away in 2026.
Cassidy-Graham puts states in an uncomfortable spot. They risk providing health care with federal money that could just disappear in 2027.
— Larry Levitt (@larry_levitt) September 17, 2017
Didn’t Bill Cassidy—one of the bill’s authors—get a lot of attention this summer for trumpeting his commitment to preexisting condition protections?
He did indeed! The Republican from Louisiana even coined the “Jimmy Kimmel test” after the late-night host delivered a moving monologue about a recent hospital visit with his young son, who was born with congenital heart disease. To pass Cassidy’s test, any legislation had to maintain Obamacare’s rules that prohibit insurance companies from capping how much they’ll spend on health care for a person over the course of his or her lifetime, a cap that people with serious medical problems can quickly hit. Cassidy even went on Kimmel’s show in order to portray himself as more concerned and compassionate toward those with preexisting conditions than some of his conservative colleagues:
Over the past few months, Cassidy has completely abandoned those principles. The new bill wouldn’t come close to passing the Jimmy Kimmel test. Millions of lower-income and middle-class families would likely lose the government subsidies they use to buy insurance. Medicaid would be a shell of its former self. And people, like Kimmel’s son, who were born with health problems would end up having to pay more to buy insurance. Allowing states to toss out essential benefits makes the rules banning lifetime limits largely meaningless, since insurance companies could stop covering procedures and medications that rack up those large charges. Kimmel himself is no longer a believer in Cassidy:
Opinion | On health care, Cassidy flunks his own 'Jimmy Kimmel test' https://t.co/ZvoxYSHMaJ
— Jimmy Kimmel (@jimmykimmel) September 18, 2017
What about Medicaid?
The bill wouldn’t just tinker with Obamacare’s expansion of Medicaid to more low-income Americans. Graham-Cassidy would fundamentally change a program that provides health insurance to 74 million Americans and has been around for over 50 years. Medicaid is currently an entitlement, meaning that the government promises to reimburse states for the costs they incur for Medicaid, with no cap on spending. If a massive public health outbreak hits a part of the country, the feds will help pay those Medicaid bills, irrespective of cost.
Graham-Cassidy—like earlier GOP proposals—would set a strict limit on how much money the government spends on Medicaid, regardless of whether a state’s health needs change over time. That would start at a specific figure for each state, and then grow each year at the pace of inflation. But, as the CBO has pointed out for past Republican proposals, the cost of Medicaid under current law would outstrip that measure of inflation. As a result, over time the federal government will spend much less on Medicaid under Graham-Cassidy than under current law, with that gap growing larger with each passing year. CBPP expects that this provision would reduce Medicaid spending by 8 percent in 2026—and those reductions would grow over time.
Which states win and lose under this plan?
One of the key components of Graham-Cassidy is rewarding certain states (especially Republican states) and penalizing others. The senators specifically singled out New York and California for receiving too much money in their view. But there a number of red states that would lose out on tons of money under the plan. Essentially, the bill would penalize states that adopted Obamacare’s Medicaid expansion and redirect some of those funds to the places that resisted the Medicaid expansion.
The CBPP has numbers on how this would play out. Among the many states that would get less federal money under the plan: Arizona, Kentucky, Alaska, Maine, West Virginia, Arkansas, Louisiana, Ohio, and Florida. Arizona, which McCain represents, would lose out on $1.6 billion in 2026 thanks to the block grant and the cap on Medicaid. In 2027, when the block grant expires, Arizona would have $6.9 billion less for health care spending than under current law.
Why is there a deadline?
Republicans know that no Senate Democrat will go along with this measure, so they are trying to sidestep the filibuster using a process known as budget reconciliation. But reconciliation comes with a number of restrictions. It was authorized for the Obamacare repeal when Congress passed the budget for fiscal year 2017, which ends on September 30. The Senate parliamentarian—the umpire who decides if actions fall within the chamber’s rules—ruled that when the fiscal year ends, those reconciliation instructions from the budget evaporate. Republicans could just put Obamacare repeal back into reconciliation rules for 2018, but that could complicate the party’s plans to prioritize tax reform and use reconciliation toward that goal.
The Senate parliamentarian could pose other problems for Republicans if they push Graham-Cassidy to a vote next week. Under reconciliation, every aspect of the bill must be directly related to the budget. Under the so-called “Byrd bath” (named for former Sen. Robert Byrd, Democrat of West Virginia, a stickler for Senate procedure), the parliamentarian can decide that provisions of the legislation are unrelated and strike them from the bill. That happened to a number of ideas in the last round of Republican proposals. But since the Senate is now facing an expiring clock, Republicans could be in a jam if the parliamentarian wipes out key provisions from the bill, causing even more uncertainty about what’s in the bill and how it would work.
What are its odds of passing?
Past GOP plans have appeared dead, only to roar back to life. So it’s not wise to count this bill out. But its odds look long. Republicans would need 50 votes to pass the bill under reconciliation (with Vice President Mike Pence casting the tiebreaking vote). Paul would have to completely disown everything he’s said for the past week in order to vote for the bill. Collins also looks to be a pretty clear no. Murkowski hasn’t expressed a definitive opinion on Graham-Cassidy, but she also didn’t publicly announce her intentions before she voted down the past versions, and this bill doesn’t solve any of the problems she identified before. And McCain has been all over the place, but if he truly believes in the principles of “regular order,” it’s hard to see how he could vote for this bill.
But never say never. Republicans have scheduled a committee hearing for next Monday in order to give Graham-Cassidy the slightest semblance of regular order. The CBO’s bare-bones report should get released around the same time, and then the Senate would have to scramble to pass the bill by the end of next week.
Even if it passes, the bill’s fate wouldn’t be certain. It would still have to pass the House, and Speaker Paul Ryan couldn’t make any changes to the bill. If he rewrites so much as a word, the Senate would have to re-approve it, and after September 30 that would require 60 votes.
Some Republicans in the House are already starting to sound skeptical of Graham-Cassidy. The Washington Post talked to some of the more moderate Republicans from New York and California who voted in favor of repealing Obamacare in the spring, but whose states would stand to lose massive sums under the Senate’s bill. “Right now, I don’t see how I could vote for it,” Rep. Peter King of New York told the Post. “It’s extremely damaging to New York.”