Graham-Cassidy doesn’t actually replace the Affordable Care Act.
This week, a group of Republican senators is scrambling to pick up enough votes for a last-ditch effort to repeal and replace the Affordable Care Act, more commonly known as Obamacare. The senators have until Sept. 30 to act.
But the Graham-Cassidy plan—named for its two leading proponents, Sen. Lindsey Graham (R-SC) and Sen. Bill Cassidy (R-LA)—does not come close to its stated objective. In fact, it would cement large portions of Obamacare in place—and open the door to a government takeover of the health care system in many states.
First, the good news. Graham-Cassidy would nix Obamacare’s individual and employer mandates. It would also take steps to rein in Medicaid’s out-of-control cost growth by phasing out Obamacare’s expansion of the program to those who make up to 138% of the federal poverty level and capping per-capita spending.
But it doesn’t go far enough.
For one, the plan keeps most of Obamacare’s taxes, including those on health insurance and prescription drugs. Next year, the former is projected to extract $13 billion from individuals and businesses. That’s equivalent to a per-person cost increase of anywhere from $220 to $280 next year.
The latter tax, meanwhile, will claim more than $4 billion from makers of branded drugs in 2018. Drug manufacturers will no doubt pass every penny of that tax along to consumers in the form of higher prices.
What’s more, the bill only gives states the option of waiving some of Obamacare’s costly requirements, like the provisions mandating that insurers cover 10 essential health benefits or barring them from charging the old any more than three times the young. Blue states are unlikely to ever request waivers. So their residents will be stuck dealing with Obamacare’s high costs and limited choices in perpetuity.
Worse, Graham-Cassidy could actually encourage states to launch full-blown government takeovers of their health care systems. The bill transforms Obamacare’s exchange subsidies into block grants that states can use as they see fit. So if a state wants to implement single payer within its borders, it can count on federal money to help pay for it.
So much for Graham’s declaration that his plan “ends [the] dream of a single payer health care system for America.”
The fate of the bill is still unclear. The Senate must vote on the measure before Sept. 30 in order to utilize reconciliation, a gambit that allows the chamber to pass budgetary legislation by a simple majority rather than a filibuster-proof supermajority.
But before the Senate can vote, the Congressional Budget Office has to issue its official score of Graham-Cassidy. The agency has promised a “preliminary assessment” by early next week that does not include estimates of the bill’s impact on the deficit, rates of insurance coverage, or premiums. The Senate parliamentarian also still has to determine if the bill actually adheres to the rules for reconciliation.
Then Republicans have to get 50 votes; Vice President Mike Pence has said that he’d provide the 51st to break a tie if necessary. It’s unclear if they have them. Sen. Rand Paul (R-KY) has already said that he won’t vote for it. If the bill’s proponents lose any more than two additional Republicans, it will go down in defeat.
The Graham-Cassidy plan would not repeal and replace Obamacare—it would repair and cement it. The Senate must turn back this last-ditch effort—and recommit to truly free market health care reform in October.
Sally C. Pipes is president, CEO, and Thomas W. Smith fellow in health care policy at the Pacific Research Institute. Her latest book is The Way Out of Obamacare, which published in 2016.