The Kaiser Family Foundation has provided an estimate of funding changes under the latest attempt at TrumpCare under the Republican Graham–Cassidy Bill. Their numbers confirm how this bill hurts everyone, with overall drop of $107 billion less made available through the Republican “block grants” than is now provided through the ACA. But even that doesn’t capture the way this is really being used as a carrot to red states and a big stick to blue states.
There would be a significant redistribution in federal funding across states under the block grant. Overall expansion states would lose $180 billion for ACA coverage and non-expansion states would gain $73 billion over the 2020-2026 period. A typical Medicaid expansion state would see an 11% reduction in federal funds for coverage compared to an increase of 12% in a typical non-expansion state.
States that attempted to do the right thing will be punished. States that deliberately denied help to their own people will be rewarded.
But that’s not all. A third of the drop in federal funds comes from putting a cap on Medicaid payments. Those caps get more damaging over time, and they don’t just affect extended Medicaid.
Almost all states face a potential loss of federal funds for their traditional Medicaid programs under the per enrollee cap; thus, the per enrollee cap offsets some or all of the gains some states may realize under the block grant and further cuts federal spending in states that may see a loss under the block grant.
Republicans can sell the idea that in the short term they stole money from Nancy Pelosi and Bill de Blasio to shower on their home state. But the truth is they’re robbing from everyone—including the poor in their own state.
BAD NEWS: Zombie Trumpcare is back. GOOD NEWS? If we stop (or delay this) past September 30, we win. Call your senators at (202) 224-3121 and tell them YOU ARE WATCHING! (After you call, please tell us how it went.)
The reason the estimates from Kaiser only run through 2026 is simple—that’s when the block grant ends. Graham–Cassidy is a plan with a sunset clause. It doesn’t just turn down the flow of funds, in the not-at-all-distant future, it shuts them off. Which would take health care off a cliff.
The block grants end after 2026, and further action by Congress would be required to continue them. If Congress did not extend the block grants, we estimate a reduction in federal funding for expanded coverage relative to current law of $225 billion in 2027 alone.
Supposedly, the bill is based just on the number of people in a state that fall within to 50 to 138 percent of poverty income brackets. But there’s an adjustment factor—one that should dismiss any pretense that the formula the bill uses is “fair.”
If the formula produces total state allotments that are greater (or less) than the designated national amounts, they are phased up (or down) on a prorated basis. There would be adjustments across states for population changes, health risk, and the value of coverage provided to people. In addition, the Secretary has discretion to make additional changes to the allocation based on state population factors that affect health expenditures.
This combination allows the states where the cost of living is highest to be punished by having their allotment pushed down to an arbitrarily degree. And if that’s not enough, there’s a hands-on fudge factor that gives a last second authority to place a thumb on the scale.
What’s not considered in this bill is any changes to the market or special factors that arise. Graham–Cassidy is deliberately blind to anything that providers may do to increase their profits at the expense of a weakness in the system.
Unlike the marketplace subsidies and Medicaid expansion under the ACA, the block grants are fixed and would not adjust based on the number of people covered or increases in health care costs.
If what Graham and Cassidy mean by “fair” is that the bill forces every American down to the level of the worst health care in the nation—that seems to be a fair evaluation.