Politics & Policy

Graham-Cassidy Is a Triumph of Federalism

Sen. Graham discusses health-care reform on Capitol Hill, September 13, 2017. (Reuters photo: Yuri Gripas)
It faces hurdles, but the GOP has an incentive to pass it.

Republicans are trying to pass health-care reform. The latest installment of this eternal endeavor is a bill drafted by Senators Lindsey Graham (R., S.C.) and Bill Cassidy (R., La.) that was introduced on September 13. The bill, which is also sponsored by Senators Dean Heller (R., Nev.) and Ron Johnson (R., Wisc.), needs but a simple majority — really 50 votes, since Vice President Pence can break a tie — to pass. But the Senate parliamentarian has set September 30 as the deadline for any Obamacare replacement to be passed via reconciliation. So, yet again, Republicans are moving fast to secure a CBO score and prepare for a vote.

The Republican project to repeal and replace Obamacare, or to make incremental and market-oriented reforms to the health-care system, seemed dead after John McCain dealt the “skinny repeal” a fatal blow back in July. But Graham-Cassidy, according to Cassidy and Graham, has a real chance to pass. Last Thursday, Graham told reporters that 47 or 48 senators supported the bill, and that Majority Leader Mitch McConnell is “all in.” Cassidy, meanwhile, said on Friday that he is “pretty confident” Republicans would muster enough support.

But a more reliable bellwether than optimism is opposition, which has been ratcheting up. Lawmakers Chuck Schumer and Rand Paul, activist groups MoveOn and Protect Our Care, and assorted medical-lobbying organizations, have announced their predictable opposition. Reporters have commenced their speculation on the psychic states of moderate senators Lisa Murkowski (R., Alaska) and Susan Collins (R., Maine). Pretend health-policy experts like Judd Legum have declared that this bill is “much worse than the last.”

It’s worth reading the Graham-Cassidy bill. It would repeal the individual and employer mandates of the Affordable Care Act, impose per capita caps on Medicaid, increase contributions to health-savings accounts, allow states to waive regulations on private insurance providers, and provide those states with block grants so they can design their own health-care systems.

If the bill became law, it would therefore move the health-care system in a state-oriented direction. A large portion of the federal money now set to fund the Medicaid expansion and subsidies of the Affordable Care Act would be instead distributed to individual states. Each state would have the freedom and means to develop its own health-care system. Reasonable people disagree over how best to design a health-care system, and under Graham-Cassidy, their ideas could be tested without causing a nationwide catastrophe and the disruption of a vital service.

Vermont, for instance, could use its money to revive Green Mountain Care, its ill-fated push for single-payer. Missouri could use its money to preserve the thrust of Obamacare. Texas, meanwhile, could use the money to implement aggressive market reforms. It might do that by applying to waive the Obamacare regulations mandating that insurers offer plans with essential health benefits. Texans could then buy more-affordable catastrophic coverage, and the state could subsidize catastrophic coverage for its poorer residents. Such reforms would bring costs down (without imposing price controls). And other states could follow its lead.

In spite — or because — of its federalist merits, the bill has its critics. The amount of federal money set aside for health care would be too low: gutting Obamacare, Democrats say. Or it would be too high: Obamacare Lite, Paul says. States could implement market-based health-care systems: axiomatically inhumane. Or they could implement single-payer: tantamount to Communism.

And there are serious critiques to be made of Graham-Cassidy. Its per capita cap on Medicaid constitutes an entitlement cut that will make it difficult to sell. Its medical-device-tax repeal is more meager tax relief than some conservatives were looking for. It permits states to apply to waive the protections of those with pre-existing conditions, and states that do so will face the challenge of helping those people pay their bills.

Moreover, there are non-ideological headwinds the bill has to navigate against. The congressional agenda for the next two weeks is packed: The National Defense Authorization Act, budget caps, an omnibus bill, and some kind of action on DACA all loom. The Congressional Budget Office’s analyses of various Republican health-care proposals have been tendentious and politically poisonous, and the CBO plans to give a preliminary assessment (which will not include specific coverage predictions) of the bill next week. The change in funding for states that expanded Medicaid under the Affordable Care Act would be negative, and, crucially, Murkowski’s Alaska is one of those.

Yet Graham-Cassidy is a chance for Republicans to say they repealed and replaced Obamacare. For that reason, if no other, expect to see a push over the coming days.


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