Senators Reveal Competing Plans for Health Reform: Block Grants vs Medicare for All

Just hours apart, 2 groups of senators unveiled health reform proposals that take a drastically different approaches to redefining the government’s role in healthcare. The one introduced by Republicans would repeal Medicaid expansion and give block grant funding to states, while the Democrats’ plan would create a single-payer health system providing Medicare for all.

The first plan was presented in a press conference where Sens. Lindsey Graham (R-South Carolina), Bill Cassidy (R-Louisiana), Dean Heller (R-Nevada), and Ron Johnson (R-Wisconsin), as well as former senator Rick Santorum, discussed their proposal. If it is to become law, it must be passed in the Senate through the budget reconciliation process by September 30. It has not yet received a score from the Congressional Budget Office.

As Cassidy explained, the bill would repeal the mandates and some taxes established by the Affordable Care Act (ACA) and split federal funds more equitably among states so governors can craft their own healthcare systems. The senators repeatedly highlighted the fact that 4 states (New York, California, Massachusetts, and Maryland) currently receive 40% of all federal Medicaid funds. Instead, their plan would reduce the amount given to states that had expanded Medicaid and allocate more money to the other states.

The bill, informally called Graham-Cassidy, would wind down federal spending on Medicaid expansion and ACA subsidies by giving this money to states through block grants, which Heller said would turn power over to the states and provide flexibility to governors and legislators by giving them “more money to cover healthcare costs as we see fit.” It’s also “a whole lot fairer” to the states, Johnson added.

Another major component of the plan is that it would cap Medicaid spending over time, which Graham argued would make "traditional Medicaid sustainable." In response to a reporter's question about the values reflected in the bill, Graham said that his goal is to leave behind "better healthcare that your grandkids can afford."

Graham repeatedly referenced the other health reform bill to be introduced hours later, explaining that the plans represent 2 very different approaches to defining the future of the American healthcare system. He called upon President Donald Trump and Senate Majority Leader Mitch McConnell (R-Kentucky) to help raise support for block grant plan, as it represents the “best and only chance” to accomplish the GOP’s goal of ACA repeal. He also warned the audience that single-payer healthcare is “inevitable” if Graham-Cassidy fails.

That outcome was precisely what Sen. Bernie Sanders (I-Vermont) later held a news conference to advocate for, joined by the 16 Democratic senators co-sponsoring his Medicare for All bill. He introduced guests who shared their stories in support of a single-payer system, then took the podium to decry the state of healthcare in America.

Like the Republican group, Sanders acknowledged the American families struggling with “insane and unaffordable” healthcare costs, but he blamed it on the greed of insurance and pharmaceutical companies. He called for legislators, citizens, and grassroots organizations to stand together and “finally guarantee health insurance to all Americans as a right.”

As the Republican senators had predicted in their news conference, Sanders did not provide an estimate of the bill’s cost, but he promised that the average American family would be better off financially under his plan and that any tax increases would be “more than offset” by the money saved on healthcare. Since the bill is essentially doomed for failure with a Republican-controlled Congress and White House, the press conference seemed intended to rally support for the idea of single-payer instead of focusing on policy specifics.

Although the 2 plans were presented by their sponsors as opposing choices to determine the long-term future of healthcare, there is a third option in play: passing a bipartisan compromise to stabilize the individual insurance markets and lower premiums. Senate committees have heard from state insurance commissioners, governors, and other stakeholders on the paths toward achieving these goals, and there is still an opportunity for bipartisan legislation to be passed by the end of September, when insurers must finalize their participation in the ACA exchanges.