It turns out, though, that the draft version of Graham-Cassidy only does one of those things. The bill would keep most of Obamacare’s revenues, save for the mandate tax penalties and medical-device taxes, but would allow no way for states that have expanded Medicaid to continue current insurance systems or cover the same amount of people that they do now. The legislation would take funds currently allocated to premium tax-credits, subsidies, basic health plans, and the ACA’s Medicaid expansion and convert some of those funds to a large pot of money from which states could apply for grants, for which they would have to pay some of their own funds to match.
Those grants, however, wouldn’t cover the same number of people. For starters, the total allocated money would be less than what’s spent on those programs today. Also, as Health Affairs reports, Graham-Cassidy likely wouldn’t count all of the Medicaid expansion population in its allotment formula, likely excluding many able-bodied adults making less than half of the federal poverty level. In addition to those restrictions, the plan would also spread funds to every state based on the sum total of existing Medicaid expansion allotments—meaning that states that haven’t expanded Medicaid would siphon off money from states that have. In essence, Graham-Cassidy would be like taking half the amount of butter and spreading it over twice the slices of bread.
And that’s not all. Graham-Cassidy goes perhaps even further than its predecessors in eroding basic insurance protections and providing for poor people, allowing states to spend their grant money on just about any kind of insurance program—with no obligations to cover a certain amount of low-income people. There would also be opt-outs for most of the significant insurance regulations in Obamacare, including its strict measures on community rating, and premium price controls on the basis of preexisting conditions, age, and other factors (except sex). The plan would also cut the ability for states to pay for their share of care through provider taxes, reducing the richness some states can afford.
So, in theory, while Graham-Cassidy would curtail the ability of the most generous states to preserve that generosity, it would also allow some of the more miserly states to be more miserly, and cover even fewer services.
Although the dismantling of the exchange markets and the Medicaid expansion, and their replacement with a more restrictive grant get the top billing on Graham-Cassidy, the bill’s changes to the underlying Medicaid program arguably will affect more people, and will also end up moving millions of people off of coverage. In that domain, Graham-Cassidy isn’t different from its predecessors, changing the Medicaid program to a per-capita cap-funding structure that would underfund the program over time and leave it less and less responsive to the health needs of low-income people.