Four Republican senators on Wednesday offered a last-ditch effort to overhaul Obamacare, proposing to convert it into a massive block grant to the states.
The lead sponsors, Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.), have been pushing the plan for weeks. Sens. Ron Johnson (R-Wis.) and Dean Heller (R-Nev.) — along with former Sen. Rick Santorum — joined them at a Capitol Hill news conference.
“Behind me is the only thing standing between you and single-payer health care,” Graham said. “A band of brothers looking for a sister.”
In fact, Sen. Bernie Sanders (I-Vt.) on Wednesday is offering his competing plan — “Medicare for All.”
Said Graham: “Bernie, this ends your dream of a single-payer health system for America.”
The proposal won praise from President Donald Trump.
“Obamacare has been a complete nightmare for the many Americans who have been devastated by its skyrocketing health care premiums and deductibles and canceled or shrinking plans,” he said in a statement Wednesday. “As I have continued to say, inaction is not an option, and I sincerely hope that Senators Graham and Cassidy have found a way to address the Obamacare crisis.”
The GOP foursome pitches the plan after past efforts to repeal Obamacare have failed. After the House of Representatives passed a bill in May, Senate Majority Leader Mitch McConnell (R-Ky.) failed to cobble together 50 votes in the Senate. He suffered a humiliating defeat in July when three Republican senators defected from a bill known as “skinny repeal.”
The Senate is running out of time. To avoid the filibuster, the Senate must pass a bill before the end of the fiscal year on September 30.
“If you believe repealing Obamacare is a good idea, this is your best and only chance of making it happen,” Graham said, “’cause everything else has failed except this approach, which will work if we get behind it.”
The bill would eliminate the Affordable Care Act tax on medical devices but leave most of the other taxes in place. The federal government then would turn that money over to states, with the flexibility to design their own rules and regulations.
“Politically, can it work? I don’t know. Technically, can it work? I suppose. But it depends on how it’s structured.”
The grants would be based on each state’s population of people earning between 50 percent and 138 percent of the federal poverty line. Starting in 2022, the federal government would add a “risk adjustment,” giving more to those with older and sicker populations. It also would offer incentives based on enrollment figures.
Currently, Graham said, 40 percent of Obamacare taxes go to four states — California, New York, Massachusetts and Maryland. His bill would slow the growth of Medicaid. Absent any changes, he said, the federal government will spend $650 billion on the health insurance program for the poor by 2027. That is more than the current defense budget of $549 billion.
Some health-policy experts said the devil will be in the details.
“Politically, can it work? I don’t know,” said Edmund Haislmaier, a senior research fellow at The Heritage Foundation. “Technically, can it work? I suppose. But it depends on how it’s structured.”
One potential concern, Haislmaier told LifeZette, is the tendency of the federal government to put more and more conditions on funds it controls.
“Even if it starts with very few strings attached … it’s hard to see how the states would retain that flexibility over time,” he said.
Grace-Marie Turner, president of the Galen Institute, told LifeZette that Obamacare has demonstrated that insurance regulation is best enacted on the state level because state governments have far more experience with it.
“The federal government is completely out of its element in trying to regulate health insurance,” she said.
If the plan is to work, it must first get a “score” from the Congressional Budget Office to determine if it would reduce the federal deficit over 10 years. Graham said the agency has been reviewing the bill for about a week. Then it must be debated and passed. That does not leave a lot of time, but Turner said she believes it is possible.
“It’s a terrific idea, and I think it has more legs than a lot of people realize,” he said. “I think they have figured out how to thread the needle.”
The bill would repeal the mandates that people buy insurance and larger employers provide it. Senators at the news conference said the mandates have led to unfair results. Johnson said about 100,000 people in Wisconsin have paid the penalty for not having insurance. About 82 percent of those people have incomes less than $50,000.
Cassidy cited Obamacare architect Jonathan Gruber, who recently wrote that the mandate has no statistically significant impact on enrollment. Cassidy said his proposal would have a much more meaningful impact by offering financial incentives to states for high enrollment.
“What does matter is if a governor gets on board,” he said.
Many states would get more money under the bill than they do currently. That includes Indiana ($1.3 billion more in 2026 relative to current law), Missouri ($1.1 billion more), Wisconsin ($1.1 billion more) and Virginia ($2.7 billion more).
“We don’t think of blue states or red states in this bill,” Cassidy said. “We think of American states.”
Santorum, who helped design the 1996 welfare reform law when he was in the Senate and worked with Graham and Cassidy on their health bill, said the key to winning passage is to enlist the support of the nation’s governors.
“I learned from experience 20 years ago that when reforming an entitlement that the best way to do that, particularly an entitlement that shouldn’t be at the federal level — that should be at the state level — [is] that you talk to governors,” he said.
Graham said he believes there is enough time to pass the bill this month before the budget window closes.
“We’ve got time to bring this up by September 30,” he said. “All we need is leadership.”
(photo credit, homepage image: Jim Greenhill, Flickr; photo credit, article image: Gage Skidmore, Flickr)