Prognosis for state if plan passes
The latest GOP proposal to repeal Obamacare could have a major impact – including ill effects – on Colorado.
The hottest name in health care — and politics — right now is Graham-cassidy (or perhaps you’ve heard it as Cassidy-graham or Graham-cassidy-heller-johnson, or GCHJ, for short).
What is it?
It’s the bill proposed in Washington, D.C., that would repeal the Affordable Care Act — you know, Obamacare — and replace it with … something much different that would have enormous consequences for Colorado and every other state. Although it is the latest in an alphabet soup of Republican-backed plans to repeal the ACA — remember the AHCA and the BCRA? — it may be the most consequential of the group.
The staid Fitch Ratings, a financial information services firm, says Graham-cassidy’s provisions, “are more disruptive for most states than prior Republican efforts. States that expanded Medicaid access to the newly eligible population under the ACA are particularly at risk under this latest bill.”
That means this bill, for Colorado especially, could be a big deal.
Why? We’re here with answers. Question: What’s in the bill?
Answer: Let’s start instead with a quick primer on Obamacare. Most people know that the ACA required people to buy insurance, prohibited insurers from charging people more if they have pre-existing conditions and also required insurance plans to cover broad areas of care, such as cancer treatments, mental health services or maternity care. Those are key for this bill.
The ACA also did two other things that are important for understanding Grahamcassidy. First, it allowed states — but didn’t force them — to expand access to Medicaid for people who are slightly above the poverty line. Second, the ACA set up a system where people with modest incomes and who buy health insurance on their own can receive tax credits to help pay their premiums and, in some cases, also receive help paying deductibles.
OK, so here’s how Graham-cassidy changes that:
First, it ends the Medicaid expansion and the insurance subsidies in 2020. It would replace them with a block grant — which is D.C. speak for one large chunk of money. States could use their block grants to provide insurance subsidies to low-income people or to set up a fund that helps pay the medical costs of the sickest and neediest patients. Or they could use the money for
any number of other health-related purposes that the bill doesn’t spell out in great detail.
The onus would be on the states to craft their own plans, and the goal, as the bill’s supporters have repeatedly said, is to give states flexibility to meet their own needs.
Looking at it another way, as Larry Levitt, a senior vice president at the nonpartisan Kaiser Family Foundation, puts it: “It’s hard to think of any other bill that commits so much federal money with so few details as Grahamcassidy.”
So that’s one part of the bill. Graham-cassidy does a couple other major things, too, when it comes to Medicaid and those protections for pre-existing conditions.
On Medicaid, it completely changes how the program is funded. Right now, states and the federal government split costs based on preset percentages; when costs go up, the states and the feds share in the burden. Grahamcassidy would cap the federal government’s contribution starting in 2020 based on the number of people enrolled in the program. The feds’ contribution would increase after that only based on inflation, not on need, which critics say could leave states holding the bag in the event of a disease outbreak or other health emergency. (You may remember this idea for “per-capita caps” from previous Gop-backed proposals.)
On the pre-existing condition protections, it gives states the option to do away with them. Same, too, with the types of care required to be covered. To do so, states would have to say how they plan to provide affordable coverage to people with pre-existing conditions. But the bill doesn’t specify how that requirement would need to be met.
In past analyses, Congress’ own nonpartisan Congressional Budget Office has estimated that states covering one-sixth of the U.S. population would choose to waive Obamacare’s coverage protections if given the chance.
The bill would also eliminate the individual mandate — that requirement that everyone have health insurance.
Q: What impact does this have on federal spending?
A: This is where it gets murky because the Congressional Budget Office — normally the mostwatched authority on this subject
— won’t have time to analyze the bill fully before the Senate is likely to vote on it. But there have been some independent analyses — and, for Colorado, the numbers aren’t good even if they aren’t exactly in agreement.
The Kaiser Family Foundation says Colorado would see nearly $2.9 billion less in federal health care spending between 2020 and 2026 compared to under the current law.
The group State Health & Values Strategies, which is funded by the Robert Wood Johnson Foundation, says Colorado would receive $3 billion less in that time, even without considering the impact of Medicaid caps.
The health care consulting group Avalere says it will mean $6 billion less for all federal health spending in the state over those years.
And the left-leaning Center on Budget and Policy Priorities says Colorado would see more than $800 million less in federal health care spending in 2026 alone than it would under current law.
Nationwide, the above groups estimate the federal government will spend somewhere between $160 billion and $243 billion less on health care between 2020 and 2026 than it would under current law. But some states — mostly those that didn’t expand Medicaid — are in line to receive more money than they would under current law. Oh, and also the block grants would expire in 2027, so Congress would have to renew them or every state would lose billions more.
Q: How would these funding changes affect me?
A: It’s too soon to really say. It’s clear that the bill would require Colorado to make major decisions about where it spends health care money and on whom it spends those dollars. But nobody really knows how Colorado — or any other state — would respond.
“This bill essentially forces every state to build its own system from scratch because it wipes out the federal infrastructure,” said Aviva Aron-dine, a senior fellow at the Center on Budget and Policy Priorities.
The Commonwealth fund took a stab at estimating how many people would drop out of the insurance market and came up with 15 million to 18 million people nationwide becoming uninsured in the bill’s first year. The Center for American Progress, a liberal group, ran its own analysis and estimated a 468,000 person net coverage loss for Colorado by 2027.
Q: What do Colorado’s elected officials think?
A: U.S. Sen. Michael Bennet, a Democrat, hates it, calling it a “partisan attempt that cuts funding and threatens coverage.”
Gov. John Hickenlooper, a Democrat, signed a letter with a bipartisan group of nine other governors opposing the plan.
U.S. Sen. Cory Gardner, a Republican, has said he is “trying to get some more information” on the bill. Gardner has voted in favor of every other ACA repeal bill to come up for a vote in the Senate this year.
Q: So when will we know if this passes or not?
A: There’s actually a firm deadline for this bill. Because the Senate is trying to pass it using convoluted rules for budget “reconciliation” that require only 50 votes to succeed but also come with time limits, it has to be approved by the end of the month. That’s one loudly ticking clock.