Graham-Cassidy Bill Risks Health Coverage and Pre-Existing Condition Protections for Georgians

The U.S. Senate plans to vote next week on yet another proposal to repeal and replace the Affordable Care Act (ACA). Like proposals senators rejected in July, the just released Graham-Cassidy bill caps and cuts the Medicaid program and allow states to remove protections that allow residents to get and keep their coverage. These changes would put hundreds of thousands of Georgians at risk of losing their health coverage.

Today, nearly 2 million Georgia children, seniors, veterans and people with disabilities receive critical health coverage through the Medicaid program. Under the current Medicaid structure, Georgia receives $2.11 in federal money for each dollar the state spends. When health care costs rise, as they do during a recession or after a natural disaster, Georgia is now able to draw down additional federal dollars to help cover the increase. Like the earlier failed proposals, the Graham-Cassidy bill aims to fundamentally change the structure of Medicaid by capping and cutting federal funding to states. Changing the structure to a per-capita cap leaves Georgia on the hook for rising costs and removes the flexibility to innovate. Instead it risks the coverage of vulnerable Georgians by creating incentives to cut eligibility, benefits and provider payments.

On top of the Medicaid cuts, the Graham-Cassidy plan would lead to long-term cuts to states by ending the ACA’s marketplace subsidies and Medicaid expansion in 2020 and converting these dollars to a block grant to be distributed to states. States can use this money for activities to support the individual insurance market, such as establishing high risk-pools and making cost-sharing reduction payments. Up to 20 percent of the money can be used to provide private health insurance coverage for residents eligible for Medicaid. Under the block grant, states won’t need to guarantee coverage or offer premium subsides for current beneficiaries in the Medicaid expansion group or in the marketplace. In the 2017 open enrollment period, about 400,000 Georgians received marketplace subsidies. These Georgians are at risk of losing the financial assistance they receive to help them afford their premiums. Georgia stands to miss out on the opportunity to accept $3 billion in federal funding in the next year alone to expand health coverage through Medicaid expansion and provide a lifeline to struggling rural hospitals.

The block grant plan is woefully inadequate: $239 billion less nationwide between 2020 and 2026 than the projected spending for marketplace subsidies and Medicaid expansion as the law stands. The redistribution of this smaller pool of money shifts money from states that expanded Medicaid or enrolled more residents in the marketplace to states that did not expand Medicaid or enrolled fewer residents in the marketplace.

Although some states like Georgia gain more funding in 2026 compared to current law under Graham-Cassidy, everybody loses in the end. The states coming out ahead in the short run will do it at the expense of health care for residents in other states. And all states would lose in the long run. In 2027, the block grant to states disappears entirely.  Combined with the cuts to Medicaid through the per capita cap, in 2027 alone Georgia’s losses will range from $4 to $5.7 billion* compared to what the state receives if the ACA is left in place. And the cuts grow in the future. For example, a new study from the consulting firm Avalere Health says Georgia will lose $48 billion from 2020 to 2036, a 20 percent reduction compared to what it would receive under current law.

The Graham-Cassidy proposal also gives states the option to remove important protections under the Affordable Care Act. Lost protections include essential health benefits requirements and prohibiting insurance companies from charging people with pre-existing conditions higher premiums. Nearly 1.8 million Georgians or 29 percent of the state’s population carry a pre-existing condition not covered under insurance underwriting practices prior to the ACA. These Georgians will struggle to find plans to cover the services they need if the state chooses to repeal essential health benefits standards. Without these standards, insurance companies can drop coverage for chemotherapy, high-cost drugs, or other costly services people with pre-existing conditions often need.

Some members of the U.S. Senate are pushing to vote on the Graham-Cassidy bill before the Sept. 30 deadline to pass the bill when it will only need 50 senators to bring it to the brink of passing. Earlier attempts this year to repeal the federal health law fell just short of the 50 votes needed to allow Vice President Mike Pence to provide a majority that sends Graham-Cassidy to the president’s desk for his signature.

Georgia will feel the strain if the long-term cuts and increased financial risk contained in Graham-Cassidy come to pass, with its constraining block grant and per-capita cap structure. Georgia cannot afford for senators to rush through a bill that risks residents’ health coverage and protections while putting a financial strain on the state treasury and its hospitals.

*The Avalere study shows Georgia gaining $10 billion in federal funds between 2020 and 2026 and $6 billion between 2020 and 2027. This results in a loss of about $4 billion in 2027 alone compared to current law. A study from the Center on Budget and Policy Priorities estimates a loss of $5.7 billion in Georgia in 2027 alone compared to current law.

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