Graham-Cassidy Healthcare Bill

Why cannot Congress give to the American people the full text of pending legislation before their floor debate and vote?

Lindsey Graham and Bill Cassidy — U.S. Senators from South Carolina and Louisiana — have with several other Senators crafted an interesting replacement for Obamacare. Let’s face it: Obamacare is imploding financially. Short of a trillion dollar U.S. Government bailout, it will die a slow death in the next few months. It does not work, and was purposely designed to fail. Why? Liberals are committed to a Single-Payer Healthcare System. (See my post from several days ago explaining that system) The Senate is planning to roll out the Graham-Cassidy bill in the next few days. Fortunately for you, I have researched the proposed bill and I actually have the bill in its form in which Congress will receive it. First, here’s a simple summary, followed by a section of Frequently Asked Questions, then I’ve attached in .pdf the actual bill to be submitted that’s 140 pages long! To save time, read the first two sections. Then please download the actual piece of legislation.  Don’t get lost in the detail! This may be the most important piece of legislation in Congress during your lifetime.

Summary of the Bill

On September 13, 2017, U.S. Senators Lindsey Graham (R-SC), Bill Cassidy (R-LA), Dean Heller (R-NV), Ron Johnson (R-WI) and former U.S. Senator Rick Santorum (R-PA) unveiled legislation to reform health care.

The Graham-Cassidy-Heller-Johnson (GCHJ) proposal repeals the structure and architecture of Obamacare and replaces it with a block grant given annually to states to help individuals pay for health care.

This proposal removes the decisions from Washington and gives states significant latitude over how the dollars are used to best take care of the unique health care needs of the patients in each state. The block grant is run through CHIP and is subject to a mandatory appropriation.

The grant dollars would replace the federal money currently being spent on Medicaid Expansion, Obamacare tax credits, cost-sharing reduction subsidies and the basic health plan dollars.

The proposal gives states the resources and regulatory flexibility to innovate and create healthcare systems that lower premiums and expand coverage.

More specifically, GCHJ:

• Repeals Obamacare Individual and Employer Mandates.
• Repeals the Obamacare Medical Device Tax.
• Strengthens the ability for states to waive Obamacare regulations.
• Returns power to the states and patients by equalizing the treatment between Medicaid Expansion and Non-expansion States through an equitable block grant distribution.
• Protects patients with pre-existing medical conditions.

GCHJ also eliminates the inequity of four states receiving 37 percent of Obamacare funds and brings all states to funding parity by 2026. As an example, Pennsylvania has nearly double the population of Massachusetts, but receives 58 percent less Obamacare money than Massachusetts.

Graham-Cassidy-Heller-Johnson treats all Americans the same no matter where they live.

Before you read the actual bill that will be submitted shortly to the full Senate, (and that final bill is attached at the end of this post) read these Frequently Asked Questions with answers.

Frequently Asked Questions

What is It?

• Federal block grant given annually to states to help individuals pay for healthcare.
• States would have significant latitude over how the dollars are used to best take care of the unique health care needs of the patients in each state.
• The grant is run through CHIP (“Childrens Health Insurance Program”) and subject to a mandatory appropriation.
• Grant dollars would replace the federal money currently being spent on Medicaid expansion, tax credits, cost-sharing reduction subsidies and the basic health plan dollars.
• Repeals the individual mandate, employer mandate, and medical device tax.

What are examples of what states can do with the money?

• Assist individuals to purchase health benefit coverage by premium support.
• Enter into arrangements with insurers, including managed care providers, to encourage market participation.
• Pay providers.
• Help with out-of-pocket costs.
• Up to 20% of the funds may be used to help the traditional Medicaid population.
• High risk or reinsurance pools.

Why are we doing this?

• Obamacare took power away from patients and states and gave it to the federal government. This returns that power to where it belongs.
• Each individual state is a laboratory of democracy, allowed to innovate to find solutions.
• Four states get 37% of Obamacare dollars. (California, New York, Massachusetts and Maryland) Support should be equal across the nation.

Do states have a match like they do under Obamacare?

• No, there is no state match under the block grant.

How is money divided between the states?

• The starting point is the amount of money the state and state residents receive from Medicaid expansion, ACA tax credits, CSR payments and BHP in 2017. The Medicaid expansion portion of the 2017 figures are brought forward using MACPAC inflators with the rest being grown by CPI-M until 2020, at which point the baseline formula begins.
• By 2026, at base rate, every state will be receiving the same amount of money for each beneficiary in the 50-138% FPL range. This ensures that high-spending states and low-spending states come to parity at the end of the time frame. In order to ease this transition, the incremental increase in the national amount available is distributed evenly each year. Each year’s US total is calculated by adding 1/6 of the total amount in 2026 to the previous year’s total US amount.
• Starting in 2021, the total number of eligible beneficiaries between 50 and 138% of Federal Poverty Level (FPL) is calculated for the United States in the previous year. Then, the percent of those in this FPL range that live in each state are calculated for each state. The total amount of federal money for a given year is then multiplied by the state’s percent of beneficiaries to give the state its amount for the year. This amount is recalculated annually to account for changes in population in the FPL range.
• Also beginning in 2021, a risk adjustment formula begins to phase in to adjust for certain population factors. The risk adjustment formula overlay will be applied in a budget neutral manner and ensure that every state remains within ten percent of the mean per beneficiary amount in 2026.
• In 2024, the model has an adjustment to account for enrollment in credible coverage, which is defined as having an actuarial value that fulfills the CHIP actuarial value which is approximately 70%.
• As under the CHIP law, CMS may grant waivers allowing lower AV value.
• If a state chooses to provide coverage with policies of (AV) less than CHIP, the amount of money the state receives is adjusted for this. This is done by multiplying the amount of money that the state would receive by the ratio of the average AV of what is provided divided by the AV of the CHIP standard.
• This coverage transition occurs in order to align incentives for states to increase enrollment among their eligible population and is done in a way that provides non-expansion states sufficient time to catch up with expansion states in enrollment.

Why was 50% – 138% FPL selected to share money between states?

• This percentage range represents the population currently on Medicaid expansion. This population disproportionately struggles to access heath insurance, and is, therefore, a better population to use when assessing need and determining state allotments.
• This extends below 100% FPL because some states did not expand traditional Medicaid coverage to 100% FPL prior to accepting Medicaid expansion.
• The goal is to achieve parity in the amount that states receive for each beneficiary within this range by 2026 on a risk adjusted basis.
• Through regular population assessments, the formula accounts for states that experience dramatic population increase or decrease and for economic factors like recession that may cause more individuals to drop into this FPL category.
• In 2024, the allocation begins to become progressively dependent on enrollment to incentivize coverage. This ramps up from a factor of 25% in 2024 to 75% by 2026.
• The different factors of the formula are specifically designed to give states flexibility and account for population shifts and economic downturns.

Are states restructured to using the money on individuals between 50-138% FPL?

• States may use the money at the individuals in any FPL with the exception that no more than 20% may be used on a state’s traditional Medicaid population.

Is this considered a further expansion of Medicaid?

• No, Medicaid expansion as currently designed would end. Instead, states can use the money how they want to, as long as it is for health care.

How are shortfalls in funding for some states addressed?

• States will have several options to address any shortfalls in their funding under the formula. If a state decides that it needs more revenue than it is receiving, it can replace the revenue lost by re-imposing the penalties associated with the employer and individual mandates, which this law repeals on the state’s businesses and residents.
• Although this law does not require states to put up state match for the Medicaid expansion, states could continue to dedicate the money that they would use for math to augment money received from the federal government.
• States will have increased flexibility in designing systems to deliver care. This should allow better use of federal dollars, saving states money.
• For those states that lose money in any year under GCA compared to BCRA grown by CPI-M, they may continue to receive their scheduled DSH dollars that are cut under the ACA, provided they put up the state match rate for funds drawn down. They could not get more DSH dollars back than the amount of money they would have received if 2020 base rate had grown by CPI-M.
• Should a state experience a shortfall in federal dollars in 2020 because their experience is different than projected, they may draw down funds from their total 2025 and 2026 allotment equal to their shortfall.

What happens to unused funds in the block grant?

• States may roll over unused funds for up to two years.

FINAL Summary

Read as much of this as you care to weigh into. But under NO condition take the word for the Media pundits explanation of what this plan is or isn’t. Case in point: Jimmy Fallon went nuts on his show blasting this plan telling lies about several parts of it — most notable stating that it does away with coverage for those with pre-existing conditions. That is categorically incorrect.

My final thought for you is simple: if Congress does not pass this law now, we are headed toward the demise of Obamacare very quickly, unless the Feds want to write really big checks totalling around $1 Trillion to bail it out simply to keep it alive a little bit longer. That’s their goal. They want a Single-Payer Healthcare system to replace Obamacare.

Thanks for reading this lengthy post. Feel free to download the actual bill in the .pdf file below titled “LYN17709.”

Thanks!

LYN17709