A coalition of conservative policymakers led by the Heritage Foundation and former Sen. Rick Santorum (R-Pa.) released an updated plan to convert federal funding for a swath of individual health coverage into block grants for states to manage.
The proposal is similar to last year's Graham-Cassidy bill, but has no sitting senators' names attached. Instead, conservative leaders outside of the Beltway, including Mississippi Gov. Phil Bryant and Kentucky Gov. Matt Bevin, are leading what they frame as a grassroots push. Conservative House lawmakers who continue to tout the need to repeal Obamacare have distanced themselves from rumors of a last-ditch attempt ahead of the 2018 elections.
Like Graham-Cassidy, the proposal by the Health Policy Consensus Group that includes members from the Heritage Foundation, the Hoover Institution would convert federal funding into single grants for states to administer. The proposal focuses on assistance to buy into private coverage, with at least 50% of the funding—including some of the funding for the low-income—earmarked for commercial insurance.
The policy brief also proposes eliminating Obamacare's mandates including essential health benefits, single risk pools and minimum loss ratio requirements for insurer profits. It also seeks to do away with the 3:1 age ratio that restricts how much more older enrollees would pay compared to younger people.
To determine funding allotments, the proposal would peg the block grants to state spending as of a fixed date on Obamacare tax credits used to subsidize exchange coverage for the low-income, and cost-sharing reduction payments that carriers are still required by law to offer their low-income enrollees although the Trump administration no longer pays them. Medicaid expansion funding would fall under the block grant but, unlike the original Graham-Cassidy bill and the GOP's previous overhaul bills, traditional Medicaid funding would not be converted to capped per-person payments known as per-capita caps.
Also unlike Graham-Cassidy, the proposal outlines a plan to redistribute the Medicaid expansion money that the states who opted not to expand do not receive.
Going against the Democratic push to offer a public option for low-income enrollees, the white paper emphasizes that enrollees in the Children's Health Insurance Program or Medicaid could opt instead for a subsidy to buy private coverage. Many CHIP and Medicaid programs are already administered by private companies through managed care.
Santorum has been shopping the plan around Washington's health industry groups and Capitol Hill this summer, but congressional leaders have made it clear they are not interested in trying to repeal the ACA again.
Sen. Bill Cassidy (R-La.), who spearheaded last year's block-granting proposal after the Senate failed to pass an ACA repeal bill as well as a so-called "skinny repeal" that only repealed the individual mandate and Obamacare taxes, has not joined this latest push. He has shifted his legislative focus to bringing down high drug prices and pushing healthcare cost transparency.
Washington policy analysts have also been skeptical that the plan can move forward in Congress and question whether it is different enough from the Graham-Cassidy proposal to draw more support.
"In large part the proposal mirrors what we have already seen fail in Congress," said Benedic Ippolito of the right-leaning American Enterprise Institute. "What is suddenly easier this time around?"
