Federal ACA Activities 9/20/17

We wanted to provide you with an update on federal activities around the repeal of the ACA. As you have heard in the press, there is renewed interest by some in the Senate to pass an ACA repeal-replace bill. What is being termed the “Cassidy/Graham” bill is gaining momentum in the House. As of today, 15 Republican Governors have signaled support for the bill, including the Governor of Arizona, which will put pressure on the Senators from those states, because they believe that it will give more power to the states for healthcare spending. This is because the bill not only addresses changes to the ACA, but also turns the Medicaid program into a block grant. However, at the same time, 12 Governor’s have signaled opposition for the bill, including the Governor of Alaska.

This legislation goes further than the March House-passed bill in terms of state flexibility for Medicaid, and the formula used to determine the block grant amount is different and it severely disadvantages California. The proposed formula for the Medicaid block grant does not include any supplemental spending, including all IGT programs and the hospital provider fee. Passage of this bill would be devastating to California.

It is unclear if the Senate has the votes to pass this bill. Rand Paul has said he will not vote for it. And there are anywhere from 3-5 additional Senators who are leaning toward a “no” vote or who are undecided. At this point, it’s too close to call in terms of the feasibility of this bill passing. Recent reports support that it will come down to Senators McCain and Murkowski. Their position is complicated by their Governor’s making public their positions (Arizona for the bill and Alaska against it). Below a link to an article by The Hill that outlines the current positions of the Senators for those who are interested in learning more about a particular member.

http://thehill.com/policy/healthcare/351341-the-hills-whip-list-republicans-try-again-on-obamacare-repeal

Here is what we do know at this time:

1) Cassidy/Graham are working around the clock to secure at least 50 votes; It is expected that Pence will be the tie-breaker and cast the 51st vote.

2) Both of our California Senators will oppose this bill, along with all the other Democrats.

3) Senators in support are in a rush to pass this bill by September 30th because that is the deadline they have to pass a bill under budget reconciliation rules. These rules only require a simple majority to pass the bill (51 votes). If they try to pass this after September 30th, they will need 60 votes.

4) House leaders have indicated that if the bill passes the Senate, they will take up the Senate-passed bill, not make any changes, and try to quickly get it out of the House.

At this time, there is no advocacy request as we are in a “wait and see” holding pattern with the Senate. Should this bill pass the Senate, we will swiftly implement an advocacy strategy for the House and will be looking to those hospitals with Republican members to contact them asking for a “NO” vote on this legislation.

Below is a brief summary of the bill:

Cassidy-Graham would:

  • Eliminate the ACA’s marketplace subsidies and enhanced matching rate for the Medicaid expansion and replace them with a block grant. Block grant funding would be well below current law federal funding for coverage, would not adjust based on need, would disappear altogether after 2026, and could be spent on virtually any health care purpose, with no requirement to offer low- and moderate-income people coverage or financial assistance. The bill’s sponsors have claimed that the rules that govern the budget reconciliation process, which allows the bill to pass the Senate with only 50 votes, necessitated that the proposed block grant be temporary and end.
  • Convert Medicaid’s current federal-state financial partnership to a per capita cap, which would cap and cut federal Medicaid per-beneficiary funding for seniors, people with disabilities, and families with children.
  • Eliminate or weaken protections for people with pre-existing conditions by allowing states to waive the ACA’s prohibition against charging higher premiums based on health status and the requirement that insurers cover essential health benefits including mental health, substance abuse treatment, and maternity care.
  • The Congressional Budget Office (CBO) has previously estimated that repeal-without-replace would cause 32 million people to lose coverage.  The Cassidy-Graham bill would likely lead to greater numbers of uninsured after 2026, however, because it would not only entirely eliminate its block grant funding but also make increasingly severe federal funding cuts to the rest of the Medicaid program (outside of the expansion) under its per capita cap.

According to the CBPP think tank, in 2026, the 20 states facing the largest funding cuts in percentage terms would be Alaska, California, Connecticut, Delaware, the District of Columbia, Hawaii, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New York, North Dakota, Oregon, Rhode Island, Vermont, and Washington. These states’ block grant funding would be anywhere from 35 percent to nearly 60 percent below what they would receive in federal Medicaid expansion and/or marketplace subsidy funding under current law.

Some projections have California losing upwards of $27 billion by 2026 under this proposal.

Please let us know if you have any questions at this time.