If Republicans Revive Health Care Again, This Is What It Could Mean For Your State
Friday, September 22, 2017
John McCain on Friday imperiled Republicans' latest Affordable Care Act repeal and replace effort when he said he "cannot in good conscience" support the so-called Graham-Cassidy bill. But McCain did also say he could at some point support the substance of his fellow Republicans' proposal.
"I would consider supporting legislation similar to that offered by my friends Sens. [Lindsey] Graham and [Bill] Cassidy were it the product of extensive hearings, debate and amendment," McCain said. "But that has not been the case."
That's notable because for the first time since Trump became president, there actually seemed to be some real ideological unity around a repeal-and-replace effort from Republicans.
If it is revived — and this effort isn't quite dead yet, because other GOP holdouts haven't stated their unequivocal opposition publicly — the Graham-Cassidy bill very well may be the foundation of how the health care system is reshaped.
What would it mean for where you live? We take a look
A big selling point of Graham-Cassidy, according to its proponents, is flexibility for states. In place of the federal dollars that fund Obamacare's subsidies and Medicaid expansion, Graham-Cassidy, which under the latest GOP proposal would be law in 2020, would give states block grants.
Those are big chunks of money given directly to states, which would have broad discretion in how to spend them.
But what's important is that those block grants would be less money than the total money that states are getting for Obamacare right now.
Graham-Cassidy would eliminate the premiums that help people pay for their health insurance and the payments helping insurance companies keep prices down, and it would also take away the Medicaid expansion created under Obamacare. States that took this expansion were able to provide Medicaid to people earning up to 138 percent of the federal poverty level.
That would disappear, with the block grants taking that money's place.
One section of the Graham-Cassidy bill spells out how the states can use the money — to help high-risk people buy insurance, for example, or to replace the premium subsidies to some degree.
One other thing the bill's architects envisioned is a decline in spending. Altogether, the block grants would reduce federal government spending by $107 billion from 2020 through 2026, according to an analysis from the Kaiser Family Foundation. The left-leaning Center for Budget and Policy Priorities puts that figure even higher, at $243 billion.
And in general, states that took the Medicaid expansion would lose out, while states that didn't take it would temporarily end up with more money. (However, Graham-Cassidy doesn't allocate block grant money past 2026.)
The idea is that while the block grants are smaller, states can do whatever they like with them — and, ideally, what they do will be more efficient than what they're doing now.
NPR reached out to the offices of both Graham and Cassidy to ask what they think would be optimal ways to spend the money, but has yet to receive a response. So we asked experts.
What might really happen
Given those basics — less money but more flexibility with that money — states would have big choices to make. And analyses have shown that Graham-Cassidy would leave millions — even tens of millions — more Americans uninsured than under the status quo.
"You can inject the money wherever you want into the problem of the uninsured, but if there's less money you're going to cover fewer people. There's no two ways about it," said Nicholas Bagley, a professor and health law expert at the University of Michigan Law School. "Or you're going to cover as many people but less generously."
So here are a few routes states could take, according to what a variety of health care experts told NPR. Given all the flexibility states might have, this is just a sampling of what states could do, but it's a start at conceptualizing how health care in any given state might look if the bill passes.
Focus on demographics. "What is the patient mix? What does the consumer mix look like in your state?" said Lanhee Chen, research fellow at Stanford's right-leaning Hoover Institution and policy director for Mitt Romney's 2012 presidential bid. "Those are going to be important factors: demographic factors; patient mix and acuity; is there one dominant employer in the state?"
For example, a state with a large population of Medicaid recipients may want to direct more funding to helping lower-income people. Some states may also allow insurers to charge more for people with pre-existing conditions, meaning those patients may need more help.
Chen used Massachusetts as another example of how a state might decide to reconfigure its health programs.
"The average income is higher; you have people with more educational attainment who are used to making choices on a broad variety of things, where maybe more health care choices would not be problematic," he said.
Boost Medicaid as much as possible. Some analyses have shown that Medicaid covers people for far less than it might cost under private insurance. With that in mind, says one expert, states might do well to just expand Medicaid as much as they can.
"If you wanted to do right for the health of the people in your state what would you do?" asks Amitabh Chandra, professor of social policy at Harvard University. To him, the answer is obvious: "The single most cost-effective thing to do is spend on the Medicaid program. It's unbelievably lean, but it's unbelievably efficient in terms of the value it delivers."
... Or not. On the flip side, a state where lawmakers want less government involvement in health care could take a different route.
"A state could say, 'We don't really like putting the Medicaid expansion population back into Medicaid so what we're going to do instead is help them get private coverage,' " said Bagley.
States could also make Medicaid less generous.
"In our Medicaid program in Ohio, we probably spend as much money now on optional benefits as we do on mandatory benefits," said John Corlett, that state's former Medicaid director. "People forget that a lot of benefits that states provide in the Medicaid program are optional."
That could save a lot of money, he said, but he added a caveat: "That's not making the program more efficient."
Help clinics that serve low-income people. As low-income Americans would be the most affected by reduced premium subsidies and shrinking the Medicaid program, one expert says it would be smart to simply direct the money to places that serve the most low-income patients.
"Your choices are just awful," cautions Sara Rosenbaum, professor of health law and policy at George Washington University — she believes that reducing money available to states both in the block grant and in Medicaid will force lawmakers to leave many of their constituents worse off.
"But the most sensible thing to do would probably be — at least where they're available — to go to your public hospital or your community hospital or community health centers, and if you have other clinics in the region that see low-income people, to give them some grants and let them care for as many people as they can."
Shift money toward (or away from) particular groups. A state may decide to move money currently used for insurance premiums down the income spectrum, Chen said.
"The ACA subsidy structure allocates subsidies for people making up to 400 percent of federal poverty," he said, noting that that comes out to nearly $100,000 for a family of four. "A state like Kansas, for example — they might have a relatively smaller distribution of people that are at that income level, and by the way, most of those people might already be getting offers of health insurance" from their employers, he said (though it's important to note Graham-Cassidy would also eliminate the employer mandate).
States could "beef up support for people making less than 250 percent of poverty," he said. "That is something you could pursue under Graham-Cassidy that you couldn't pursue under the ACA."
This is contingent upon there being enough money, though, because once again, Graham-Cassidy would reduce federal funds to many states.
Move toward single-payer? Yes, it's a Republican bill, but it grants a lot of leeway ... meaning states could use their block grants to move closer to a single-payer system.
"Some states are going to experiment with how they bring more centralization into their marketplace," said Chen. He hesitated to say single-payer — "I don't know if there's enough here resource-wise to make that work" — but he noted that a state might decide to create "some kind of a Medicaid buy-in system."
Bagley explained how this sort of system might work.
"One alternative would be to take the money and create a state-based Medicaid-type program that paid Medicaid rates and have a Medicaid-type plan cover all the uninsured in the state," said Bagley. "So it wouldn't be single-payer, but it would be a single-payer approach for the uninsured."
For this reason, some Republicans remain displeased with Graham-Cassidy. Louisiana Sen. John Kennedy this week said he was undecided on the bill for this reason.
"If you give California and New York a big chunk of money they're gonna set up a single-payer system. And I wanna prevent that," he said, as reported by Bloomberg's Sahil Kapur.
However, GOP senators remain divided; Wyoming's John Barrasso responded, "Either you believe in states' rights or you don't believe in states' rights."
Spend on something else. Or states may use the money in a way the bill totally does not intend: that is, for things that are totally unrelated to health care.
Though it's true Graham-Cassidy specifies ways in which states must use the money, the bill does not stop states from simply using the federal money to take the place of other state spending.
"It's just so much money, and block grants have a way of being pretty fungible, and states and others will figure out ways to divert these moneys to other purposes if they want to," said Corlett.
Chandra elaborated on the kinds of choices states could find themselves making.
"I can maybe say I really like the exchanges in Obamacare, and I'm going to subsidize the exchange premiums," Chandra elaborated. "Or I could decide to build a brand-new football stadium. That's the degree of latitude we're giving states."
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