The latest, last-ditch attempt by Republican lawmakers to destroy President Obama’s signature health law, the Affordable Care Act, has appeared in the form of something called Graham-Cassidy, the brainchild of Republican Senators Lindsay Graham of South Carolina and Bill Cassidy of Louisiana. Like its predecessors, it would target some of the most vulnerable people in North Carolina: the poor, the sick, and the state’s many children who rely on Medicaid as a source of health care. In a statement, Gov. Cooper said the latest iteration of the ACA repeal “may be even worse than recent proposals: Raising premiums, weakening protections for people with preexisting conditions, and slashing over $1 billion from North Carolina’s Medicaid program.”
He’s not wrong.
The newest attempt to blow up the ACA is decidedly radical. It would turn the law’s private insurance subsidies into nebulous block grants, eliminate the expansion of Medicaid, the state- and federally funded health-insurance program for millions of low-income and disabled Americans, and, depending on the state, allow insurance companies to charge patients with preexisting conditions higher premiums and stop covering certain requirements under the ACA, such as maternity care. It would also kill the famously controversial individual mandate with no replacement, a move analysts predict is likely to destabilize the insurance market.
So how would all of this play out in North Carolina? It all comes back to the funding, and in this case, the block grants. Under Graham-Cassidy, the government would provide states with a lump sum that they could then spend on insurance coverage and other health-related options. It would also change Medicaid’s funding structure from an open-ended approach to a block grant or per capita cap.
This would play out dramatically differently across states. The bill uses a formula to essentially redistribute funding from the thirty states that expanded Medicaid to those that did not (among them: North Carolina), hitting states that participated in the expansion the hardest. Take California. By 2026, according to a study out today from Avalare Health, the state could see a $129 billion reduction in federal funding. Compare that to Texas, which declined to take part in the expansion; it would gain $24 billion.
“The largest impact of the proposed bill would be the reallocation of federal dollars between states,” writes Elizabeth Carpenter, senior vice president at Avalere Health. “Medicaid expansion states and states that have enrolled a high number of people in insurance affordability programs would be most adversely impacted.”
North Carolina’s losses wouldn’t be as extreme as California’s, but the Old North State still wouldn’t fare well. By 2026, Avalare estimates that North Carolina will lose $1 billion in federal health spending. (Because the bill doesn’t fund anything after 2026, North Carolina could lose another $8 billion in 2027 and $98 billion by 2036.) That’s on top of the state’s decision not to expand Medicaid funding, leaving hundreds of thousands in the cold. Further Medicaid cuts could have a significant impact on the children of North Carolina: about one million of them are on Medicaid, and they comprise about two-thirds of all Medicaid enrollees in the state. It’s unclear exactly how many children would lose their insurance under the latest ACA repeal iteration—the Senate is rushing to pass this thing without a full Congressional Budget Office score, after all—but for context, the Urban Institute estimated that 142,000 more children would be uninsured over the next five years in North Carolina under the Senate’s unsuccessful July proposal to undo the ACA, from which this one borrows (and then expands) its basic principles.
This time around, the left-leaning Center on Budget and Policy Priorities predicts that the latest proposal will cut and cap Medicaid funding “for tens of millions of seniors, people with disabilities, and families with children starting in 2020.”
“Instead of the existing federal-state financial partnership, under which the federal government pays a fixed percentage of a state’s Medicaid costs, Cassidy-Graham would cap federal Medicaid funding at a set amount per beneficiary, irrespective of states’ actual costs,” CBPP writes. “The cap would grow more slowly each year than the projected growth in state per-beneficiary costs. Prior CBO estimates suggest that Cassidy-Graham would thus cut the rest of Medicaid (outside the expansion) by $175 billion between 2020 and 2026, with the cuts reaching $39 billion (8 percent) by 2026, relative to current law.”