Graham-Cassidy: The Wrong Prescription for Children and Families

Many of us thought that the effort to “repeal and replace” the ACA died on the Senate floor in July. Maybe not. This past Wednesday, Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA), joined by two other Republican Senators, released yet another “repeal and replace” proposal. The Senators hope to take their proposal to the Senate floor by September 30, when the number of votes needed for passage will change from 50 to 60. It’s hard to imagine a worse outcome for low-income children and families.

In a nutshell, here’s what the proposal does. Effective in 2020, it repeals the Medicaid expansion for low-income adults as well as the tax subsidies for premiums and reductions of cost-sharing for health insurance in the Marketplaces. It replaces these with a block grant of federal funds to states to establish their own health care coverage arrangements. And – surprise! – it caps federal payments to state Medicaid programs beginning in 2020.

The block grant funding expires in 2026; the cap, which is dialed down in 2025, is forever.   This is a massive double-whammy for states. The federal government would leave the states holding the bag for the costs of insuring the millions of Americans who gained coverage as a result of the ACA. And it would limit its share of Medicaid costs for over 70 million children, families, elderly and disabled in perpetuity.

CBO has not yet estimated the cost and coverage impact of the proposal. But as the Center on Budget and Policy Priorities has pointed out, many of the provisions are similar or identical to previous versions of “repeal and replace” and will have the same effect: millions of Americans will lose health care coverage, and the federal government will shift massive costs to states in perpetuity.

Here’s what the proposal doesn’t do: it doesn’t renew CHIP funding after September 30. (That would be a far better use of Senate floor time in the remaining two weeks of the fiscal year.) It’s not that the authors forgot about CHIP: the proposal uses the CHIP statute as a platform for adding the new time-limited block grant. But there’s no funding for children’s health coverage, just repeal of coverage for adults. The proposal also does CHIP no favors by capping federal Medicaid payments to states. As readers of Say Ahhh! Blogs know, CHIP stands on the shoulders of Medicaid.  Graham-Cassidy, like the previous Senate “repeal and replace” proposals, takes a fiscal crowbar to Medicaid’s knees.

In short, Graham-Cassidy is a double whammy not just for states but also for kids and the providers who treat them. The Census Bureau just announced that during 2016, 95 percent of children in this country have health insurance. Medicaid and CHIP are two important reasons for that success. It is hard to see how we will be able to maintain this success, much less improve upon it, if the Senate adopts this proposal.

But perhaps I’m missing something. At 141 pages, the proposal deserves a close read. Let’s see what CBO thinks about it. And let’s try to fully understand its implications for children and families. The Senate HELP Committee just concluded four days of bipartisan hearings on stabilizing the Marketplaces. Both the HELP and Finance Committees should hold bipartisan hearings on Graham-Cassidy, which will repeal not just the Marketplaces but Medicaid expansion and the federal-state financial partnership that undergirds Medicaid.  Inquiring minds want to know.












Andy Schneider is a Research Professor at the Georgetown University McCourt School of Public Policy.