Graham-Cassidy bill would cut funding to 34 states, report shows

WASHINGTON – The latest Senate Republican drive to dismantle the Affordable Care Act would sharply reduce federal spending on health insurance and cause 34 states to lose such funding, according to an analysis that details the checkerboard of winners and losers the plan would create.

The analysis by Avalere Health, a Washington-based health-policy consulting firm, forecasts that the amount of federal money devoted to Medicaid and private insurance subsidies would shrink by $215 billion between 2020, when the plan would begin, and 2026, the last year money is provided in the Cassidy-Graham bill.

More than half of the overall cuts in the legislation – named for its primary sponsors, Republican Sens. Bill Cassidy, La., and Lindsey Graham, S.C., – would come from Medicaid, the analysis shows.

States with relatively low medical costs, skimpy Medicaid benefits and no program expansion would win out. Texas would gain more than any state – $35 billion from 2020 through 2026. On the other hand, states with higher-priced medicine and generous benefits for their low-income residents – such as California and New York – would lose billions of dollars.

But it is not only the largest states that would win or lose. Virginia, which has long had stringent Medicaid benefits and eligibility rules, would gain $3 billion, while Maryland, a Medicaid expansion state under the Affordable Care Act, would lose $13 billion.

The bill “redistributes money from states that expanded Medicaid to states that didn’t,” said Caroline Pearson, a senior vice president at Avalere, which released the report Wednesday. “It is a very clear transfer.”

The analysis is among a wave of predictions of the impact of the starkly conservative measure. The bill has given the GOP’s years-long quest to abolish much of the ACA a surprising new chance, two months after the dramatic failure of other Senate Republican legislation.

The Cassidy-Graham measure would kill central features of the 2010 law, including its insurance subsidies, coverage requirements for individual Americans and large businesses, and benefits and other rules for health plans sold in ACA marketplaces. Instead, in a devolution of unprecedented scale, a smaller amount of health-care money would be reshuffled around the country as block grants for much of the coming decade, with states having great freedom on how to spend it.

The plan also would transform the federal role in Medicaid for traditional recipients, ending the program’s half-century tradition as an open-ended entitlement in which the government gives each state a fixed share of whatever its costs are. Instead, federal aid would be converted to a per-person cap – a method that does not adjust as easily over time to expensive improvements in medical care or to possible economic downturns in which low-income people flock to the program.

The analyses of the impact of such massive changes have assumed outsize significance given the calendar. The Senate GOP is trying to speed toward a vote before the expiration on Sept. 30 of special budget rules that would allow lawmakers to pass the bill with a simple Republican majority and no Democratic votes.