Fearing the current GOP plan to repeal and replace Obamacare won't satisfy enough moderates and conservatives, Sen. Lindsey Graham (R-S.C.) and Sen. Bill Cassidy (R-La.) have floated an idea they think could unite 50 Republicans.
On Thursday, the two revealed a bill that would keep taxes on wealthier Americans that helped fund Medicaid expansion and subsidies for people to buy coverage on the individual market.
Those taxes would generate $500 billion over 10 years, the senators say. Their bill estimates the federal government spent about $110 billion in 2016 on the Affordable Care Act. Their proposal would repeal a tax Obamacare imposed on medical device makers. It would also repeal the individual mandate to purchase health insurance and the requirement for employers to provide affordable coverage plans.
Though Graham says he still plans on backing the current Senate bill, he and Cassidy introduced this bill as another option for senators in expansion states who fear backlash from their constituents on the possible loss of Medicaid coverage.
The current Senate bill cuts federal funding for nearly all Medicaid populations. It allows some coverage designs to states, including the option of allowing non-compliant individual health insurance plans, but does not allow any state to retain the individual mandate.
The Graham-Cassidy bill contains some elements of an earlier bill Cassidy co-sponsored which proposed that states that wanted to continue Obamacare could, and others could automatically enroll uninsured people.
The more recent bill proposes that in states that choose not to continue Obamacare, residents receive money to deposit into their health savings accounts. They could use that money to buy health insurance. A partial payment would be available to those who are low-income who get employer-based insurance. The HSA contributions could also be used to enter into a direct primary care arrangement, rather than buying insurance.
The bill proposed that states would receive 95% of what their residents were getting under current law, either for subsidies and cost sharing or for the federal match for the Medicaid expansion population.
If the state chose not to maintain subsidies, all of the people who qualified for HSAs would get a larger amount of money. The HSA contributions would begin to phase out at individual incomes of $90,000, or married couples at $150,000.
The bill suggests—but does not require—that states that do not continue Obamacare could have "an initial open enrollment period during which qualified residents may enroll in health insurance coverage without the imposition of any underwriting." So in states that choose not to continue Obamacare, there could be price discrimination against those who have pre-existing conditions.
Graham and Cassidy's idea of block grants only applies to the expansion population and to those in the individual market.
Graham said on his website that states should have the power and funding to make decisions for their residents.
"Obamacare is going to collapse," Graham wrote. "Instead of having a one-size-fits-all solution from Washington, we should return dollars back to the states to address each individual state's health care needs. Just like no two patients are the same, no two states' health care needs are the same. A solution that works in California may not work in Virginia."