Understanding the Impacts of Graham-Cassidy-Heller-Johnson on California and What You Need to do About it

Understanding the Impacts of Graham-Cassidy-Heller-Johnson on California and What You Need to do About it

They have saved the worst for last or next to last or maybe a never-ending nightmare of repeal efforts (Groundhog Day). The salient points of Graham Cassidy are: a shift and reduction of the ACA’s financial resources from the federal government to the states as a time limited block grant; a shift of federal resources from the leader states to the most resistant Southern states that have done little or nothing beyond obstruction; waivers to allow states to disenfranchise and/or insurers to charge higher premiums to those with pre-existing conditions and a per capita cap on the federal match for the Medicaid program. For California, these proposals could not be more damaging. A recent report from the CDC (Centers for Disease Control) found that the uninsured rate in California had fallen from 17% to 7% due to the state’s successful implementation of the ACA. This bill will erase all that progress and do far more extensive damage to the state’s budget and health care system. Over 30 million Americans would lose their coverage.

First let’s discuss the details, then let’s detail the impacts of this measure. Graham-Cassidy would combine Medicaid expansion funding with Premium Assistance funding with Cost Sharing Reduction funding into a temporary health care block grant to the states, lasting from 2020 to 2026. These funds would be distributed based on a state’s share of low-income families and individuals (50-138% of FPL) regardless of whether a state actually covers anyone. There would be no accountability that the funds be spent on care or coverage for the uninsured. Each of the fifty states would devise its own plan.  

In the funding formula devised by the Senators, the states (like California) that have been most successful in covering their citizens lose big time. The states (like Texas) that have sought to block and hinder implementation of the ACA at every turn win big time. “A study of the bill from Avalere puts the loss at $45 billion for New York and $78 billion for California, while the KFF (Kaiser Family Foundation) analysis estimates New York would lose $52 billion and California would lose $62 billion.” “Texas emerges as one of the biggest winners under the proposal, getting an extra $35 million between 2020 and 2026 compared to current law, according to the Avalere study. The KFF study estimates Texas would get about $28 billion more in that time period. Smaller states that didn’t expand Medicaid will also see more funding: Georgia could see an additional $10 billion between 2020 and 2026, according to the Avalere study. Other big winners are Missouri, Mississippi and Alabama.”

After 2026, the health care block grant expires, so that all states lose. And these losses are massive from 2026 through 2036. The total loss in federal health funding for the states would be over $4 trillion dollars from 2020 through 2036. The estimated cumulative impact of these changes on California through 2036 is about $800 billion.

On top of the block grant, Graham-Cassidy would cap the spending growth of the traditional Medicaid programs for the aged and disabled, for children and pregnant women. The per capita caps begins at the CPI for medical care plus 1% for the aged and disabled and decline to the CPI for all goods and services in 2025. The financial impacts of the per capita cap on state health budgets are equal to the loss of the ACA expansion funding. The loss of federal financial participation in California in the year 2026 alone is $27 billion -- more than a quarter of the entire Medi-Cal budget in 2017.

States may also seek waivers of the key consumer protections in the Affordable Care Act. They can waive the age rating rules, the ten essential health benefits, the medical loss ratios and the protections for those with pre-existing conditions. So even if you are not dependent on the ACA’s financial help to pay your health care premiums and cost sharing, you are likely to be subjected to the insurers’ ruinous medical underwriting practices that prevailed prior to the ACA.

So get on the phone or the email now and let your Senators and Representatives know what you think of these changes. Do it now!


References: Heilman and Wexiel, “Which States could Win and Lose From the New ObamaCare Repeal Bill” The Hill (9/21/16)

Carpenter and Sloan, Graham-Cassidy-Heller-Johnson Bill would Reduce Federal Funding to the States by $215 Billion, Avalere Health (9/20/17)

Leibenlift, Park, Broaddus and Dine, Like Other ACA Repeal Bills, Cassidy-Graham Plan Would Add Millions to the Uninsured, Destabilize Individual Market, Center on Budget and Policy Priorities (9/20/17)

California HealthCare Foundation, ACA Repeal Resource Page (September, 2017)

Goldstein, Medicaid Expansion States to lose $180 billion under Cassidy-Graham Plan, Washington Post (9/21/17)

Ho, Uninsured Rate in California Drops to Record Low, CDC estimates, San Francisco Chronicle (2/14/17)


Prepared by: Lucien Wulsin








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