5 Ways Graham-Cassidy Bill Differs From Previous Repeal Efforts

A budget amendment developed by Senators Lindsey Graham, R-South Carolina, and Bill Cassidy, R-Louisiana, represents Senate Republicans’ last chance to pass legislation repealing the Affordable Care Act (ACA) before the fiscal year expires on September 30. Numerous repeal bills have been proposed and rejected in the Senate over the past few months, but Graham-Cassidy differs from these attempts in some key ways.

Here are 5 components that set the Graham-Cassidy bill apart from previous legislation, like the Better Care Reconciliation Act (BCRA) that failed in the Senate in July.

1. Establishing block grants to states

Whereas the BCRA would have restructured the premium assistance tax credits provided under the ACA, Graham-Cassidy repeals federal funding for the premium and cost-sharing subsidies and Medicaid expansion, then distributes the money directly to states starting in 2020. This program, called the Market-based Health Care Grant Program, will give patients a voice by letting states make decisions on how to structure their own healthcare programs, Graham said in a press conference unveiling the bill on September 13.

The block grants also use new formulas to allocate the money, which analysts say would generally result in funding cuts for states that had expanded Medicaid and increases for those that had not. Graham and Cassidy said this would be a more equitable solution than the current situation, as 4 expansion states now receive 37% of all federal ACA funding.

2. Requiring sharper drop-off of Medicaid expansion funding

Graham-Cassidy would repeal expansion states’ authority to cover expansion-eligible adults through Medicaid starting in 2020, and would eliminate the enhanced federal funding rate for those states at that time. In contrast, the BCRA would have lowered the matching rate from 90% in 2020 to a traditional state match by 2024, providing a slower phase-out.

Because states will lose their Medicaid expansion funds and have them redistributed through the block grants in 2020, they will need to develop their own healthcare coverage systems by then. Observers including the National Association of Medicaid Directors are concerned that will not be enough time for most states.

3. Loosening insurance regulations in individual market

The bill allows states to waive the ACA's premium rating rules on plans offered under the new block grant programs, including the prohibition on charging higher premiums for enrollees with preexisting health conditions and the requirement that plans must cover 10 essential health benefits.

Opponents of the bill, including comedian Jimmy Kimmel, worry that people with preexisting conditions may not be able to afford coverage if insurers are allowed to raise rates due to health history. The text of the legislation specifies that a state seeking such a waiver must submit an explanation of how it “intends to maintain access to adequate and affordable health insurance coverage for individuals with preexisting conditions,” although it does not specify how such proposals will be enforced.

4. Creating a federal reinsurance program

Graham-Cassidy includes a federal reinsurance program intended to provide “short-term assistance to address coverage and access disruption and provide support for states.” It allocates $10 million in 2019 and $15 million in 2020 to CMS, which will then fund agreements with insurers to cover costly patients.

The idea of reinsurance had previously been proposed by Democrats as a way to stabilize the ACA marketplaces and lower premiums. A bill introduced in June by 2 Democratic senators sought to create a permanent reinsurance fund of $15 billion per year meant to “offset larger than expected insurance claims.”

5. A serious sense of urgency

Perhaps the most significant difference between Graham-Cassidy and the other proposals is the current political and legislative context surrounding ACA repeal. Republicans have until September 30 to use the budget reconciliation process, which requires 50 votes (plus a tie-breaking vote from Vice President Mike Pence) and no Democratic cooperation. With time running out, Republican lawmakers are feeling the pressure from the White House, constituents, and other repeal advocates to follow through on their long-awaited promise of undoing former President Barack Obama’s signature health law.

Senator Rand Paul, R-Kentucky, has said he will vote against the bill, and Susan Collins, R-Maine, is assumed to be a "no" vote, as well. Every other GOP senator, including Lisa Murkowski of Alaska and John McCain of Arizona, who both voted against prior repeal efforts, would have to vote in favor of Graham-Cassidy in order for it to pass.