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September 25, 2017 01:00 AM

Revised GOP repeal bill has everyone racing to figure out its impact

Harris Meyer
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    Healthcare industry analysts scrambled to figure out how a revised Senate GOP healthcare bill released Monday morning would distribute federal funding among the states and loosen protections for Americans with pre-existing medical conditions.

    Meanwhile, a Senate Finance Committee hearing Monday afternoon to consider the Graham-Cassidy bill to repeal and replace the Affordable Care Act had to be delayed while protesters loudly chanted calls to protect Medicaid, which would be capped and cut under the bill.

    The hearing started even though the Congressional Budget Office had not yet issued what it said would be a limited fiscal review of the bill. The CBO had said it would not have time to complete a full estimate of the bill's impact on coverage and premiums before Sept. 30, the Senate Republicans' budget reconciliation deadline for passing the bill with just 51 votes.

    A leaked summary of the revised Graham-Cassidy bill indicated that Alaska and Maine—states represented by GOP senators whose votes are pivotal to passing the bill—would get more funding than under the original legislation. Alaska would get 3% more in block grants between 2020 and 2026, while Maine would get 43% more.

    "Our hope is that Maine gets a billion dollars more for four to five years, that we correct some problems that have been evident in Alaska," Louisiana Sen. Bill Cassidy, one of the chief authors of the bill, told the Washington Post Monday.

    But independent analysts noted that those two states, along with all the rest, would receive much less funding in total when the bill's cuts in federal payments for traditional Medicaid are considered. And there is no provision for funding the block grants for any states after 2026, leading Avalere Health to project that states would receive $4 trillion less in federal funding by 2036.

    Prospects for the bill looked shaky Monday. Maine Sen. Susan Collins said Sunday she had a hard time seeing herself voting for the bill, though she didn't absolutely commit herself. Alaska Sen. Lisa Murkowski reportedly was still studying the impact of the bill on her state. Neither commented on the sweeteners added to win their votes.

    Kentucky Sen. Rand Paul said Monday he opposed the revised version of the bill.

    Senate Majority Leader Mitch McConnell needs the votes of 50 of the 52 Republican senators to pass the bill, which he wants to bring up for a vote this week. No Democrats are expected to support it.

    Confusion about the last-minute revisions to the bill and their impact on individual states was widespread.

    "I don't know what the changes are. Do you?" said Jeffrey Austin, vice president of government affairs for the Maine Hospital Association, who estimated the original bill would have reduced the ACA's funding for premium and cost-sharing subsidies by at least $700 million through 2026.

    There also was confusion about the bill's amended provisions for letting states relax the ACA's insurance market rules that protect people with pre-existing conditions. Those rules require health plans in the individual market to accept all customers regardless of health status; provide essential benefits; charge everyone the same premium except for a permitted 3-to-1 variance based on age; and set no annual or lifetime caps on benefits.

    There is general agreement that under the revised Graham-Cassidy bill, states could let insurers discriminate against sicker people. Unlike the original bill, states would not have to seek formal waivers from HHS to change insurance market rules. But the revised provisions are convoluted.

    One part says states are free to change the ACA's rules for health plans paid through Graham-Cassidy block grants, according to an analysis by Nicholas Bagley, a health law expert at University of Michigan. Another part seems to indicate insurers still wouldn't be able to vary premiums on health status. Still another section suggests they could.

    Bagley's interpretation is that states could free insurers to offer plans lacking some of the ACA's essential benefits, such as maternity or behavioral health coverage, with much higher cost-sharing than allowed under current law. "It allows insurers to screw sick people," Bagley wrote. "It's just not clear exactly how they can screw them."

    On Saturday, however, America's Health Insurance Plans and the Blue Cross and Blue Shield Association joined the American Hospital Association, the American Medical Association and the American Academy of Family Physicians in rejecting the weakening of insurance market rules.

    "We agree that the bill will cause patients and consumers to lose important protections, as well as undermine safeguards for those with pre-existing conditions," the groups said in a joint statement. "Without these guaranteed protections, people with significant medical conditions can be charged much higher premiums, and some may not be able to buy coverage at all."

    It's also uncertain whether Senate parliamentarian Elizabeth MacDonough will decide this week that the insurance market changes comply with Senate rules requiring all provisions of a budget reconciliation bill pertain primarily to budget issues. She struck out such provisions in previous Senate repeal bills.

    There were additional financial sweeteners in the revised bill for Alaska and Murkowski, whose opposition would almost certainly kill the bill.

    The amended version would steer $500 million to Alaska to continue funding its reinsurance program, which has been effective in reducing premiums. It also would give Alaska a piece of a $1.5 billion contingency fund along with four other states with low population density.

    The changes presumably would further reduce funding for other states that aren't targeted for such sweeteners, since the amended bill does not change the total amount of block grant funding.

    An analysis last week by Avalere Health found that the Graham-Cassidy bill would reduce federal payments to the states for coverage subsidies, Medicaid expansion and traditional Medicaid by $215 billion through 2026 and by more than $4 trillion from 2020 to 2036. While all states would take a hit over the long term, 34 states would experience cuts from 2020 to 2026, while 16 would see a temporary boost in funding.

    From 2020 to 2026, California would see its federal funding reduced by $78 billion, New York by $45 billion, Maryland and Oregon by $13 billion each and Washington state by $10 billion. On the other hand, Texas would see its funding increase by $35 billion, while Alabama and Georgia each would reap $10 billion more.

    The Graham-Cassidy bill's formula for distributing block grants to the states initially would be based on each state's historical spending on subsidies, then would shift to other factors including the number of low-income residents as a percentage of low-income people nationally and the percentage of people enrolled in coverage.

    Under the revised bill, the CMS administrator would have considerable discretion in deciding how to adjust the distribution of funding between the states.

    If the Graham-Cassidy bill does not pass this week, there is a possibility the Senate health committee may resume its work on crafting a bipartisan bill to stabilize the individual insurance market. That effort was derailed by the new repeal effort.

    "I hope they will resume their work should this last attempt at a partisan solution fail," Sen. John McCain of Arizona said Friday when he announced his opposition to the Graham-Cassidy bill.

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