The Graham-Cassidy health reform bill is notable for how much its policy caters to governors—no matter their party affiliation. Its private-market provisions are premised on a simple plan: Take the money projected to be spent on four key Obamacare-driven expenditures, including the Medicaid expansion, tax credits, and cost-sharing payments, and block-grant it to states beginning in 2020. No more Medicaid expansion. No more tax credits. No more cost-sharing payments. Governors could use the grants as they see fit for specified purposes of health policy. But there feasibly could be a smorgasbord of health insurance regimes across the country: conservative Obamacare replacements, Obamacare retentions, and single-payer attempts alike. Louis Brandeis, this Bud’s for you.
The formula that determines each state’s block grant becomes more complex over time; in 2020, it is based on each state’s percentage of all the country’s eligible beneficiaries between 50 and 138 percent of the poverty line. In 2023, the formula becomes weighted for how many of those potential beneficiaries are enrolled in basic coverage the previous year. This tweak would seem to reward states that do the best job of insuring low-income people. But the formula’s ultimate goal is stated in a summary: “By 2026, each state will receive the same base amount for every eligible American.” Roughly, that comes out to $4,400.
This could come at deep expense to somewhere like Massachusetts, which is high-cost and has a wide range of Medicaid beneficiaries relative to most states. It expanded Medicaid under Obamacare for low-income consumers and adopted high-income limits on beneficiaries prior to the law’s existence. The combination of these factors means the commonwealth receives a lot of federal health care dollars—which under Graham-Cassidy would be redistributed significantly. Massachusetts governor Charlie Baker, a Republican, made his case to the Senate health committee earlier this month.
“The proposal would dramatically, negatively affect the commonwealth of Mass. I mean, we’re talking billions and billions of dollars over the course of next four or five years,” he said. “The problem I have with the Graham-Cassidy piece, especially for a state like us, is it assumes the cost of health care across the country should be the same everywhere.”
Gov. Chris Sununu of New Hampshire, another GOP state executive, also criticized Graham-Cassidy over projections it would cost his state money. Republicans John Kasich of Ohio, Vermont’s Phil Scott, and Nevadan Brian Sandoval asked the Senate majority and minority leaders not to consider the bill in a letter Tuesday—Kasich has been pushing his own bipartisan framework with Colorado governor John Hickenlooper, and Sandoval’s position deviates from that of Nevada senator Dean Heller, a vulnerable Republican incumbent who is cosponsoring the legislation. Sandoval previously opposed other Obamacare repeal attempts, in one case because of how it would affect Medicaid in his state.
But other states stand to get a better deal relative to current law. Take Utah, which is America’s youngest state and did not expand Medicaid. Graham-Cassidy would treat its eligible population equal in long-run to those in other states, including older ones and those that expanded Medicaid. Utah governor Gary Herbert is among the bill’s most enthusiastic supporters. He favors the idea of proportionate spending to the states—“and then [letting] us do what we think we can do with, I think, some broad parameters to provide health care innovation to the marketplace,” he said during a news conference Friday.
Other GOP governors had expressly supported the bill itself prior to Tuesday, not just the general idea of block granting health dollars. Scott Walker is the most prominent one; he told Breitbart News that Graham-Cassidy is “awesome” and a “perfect fit,” the outlet reported last month. An aide to North Dakota governor Doug Burgum told THE WEEKLY STANDARD Burgum had been in contact with Walker about the proposal and supported it. His counterpart in South Dakota, Dennis Daugaard, also backs the plan, an aide told TWS. Maine governor Paul LePage appeared to support Graham-Cassidy in an indirect fashion, via a fundraising email sent through the state party. And perhaps the most significant gubernatorial endorsement arrived Monday from Arizona’s Doug Ducey, whose state’s senior senator is John McCain—one of a couple of potential swing votes in yet another tight legislative fight.
Sen. Lindsey Graham, who has championed the block grant approach with Sen. Bill Cassidy since the upper chamber’s last Obamacare repeal effort fizzled, said recently that President Trump encouraged him to round up gubernatorial support. “The president said, if you get 20 governors on board, he’ll stand with them,” he said, per the Washington Post. “Make some calls. Help us get to 20.”
Some others, like Tennessee governor Bill Haslam and Oklahoma’s Mary Fallin, had been receptive to the idea but not completely sold, according to statements provided to TWS. The theme was that the block grants be funded “adequately.” But those two, along with Iowa governor Kim Reynolds, who had a similar position, signed a letter to Senate majority leader Mitch McConnell dated Tuesday that was more direct in its endorsement. “Adequately funded block grants to the states, along with maximum flexibility and control, is the best option on the table. We appreciate the work of Senators Lindsey Graham, Bill Cassidy, Dean Heller, and Ron Johnson to draft language that embraces this simple, yet profound concept,” it reads. “We call on the members of the United States Senate to move quickly to repeal Obamacare and replace it with flexible block grants to the states.”
Other signees included Republican governors Asa Hutchinson (Ark.), Eric Holcomb (Ind.), Sam Brownback (Kan.), Matt Bevin (Ky.), Phil Bryant (Miss.), Eric Greitens (Mo.), and Pete Ricketts (Neb.).
It’s natural that money is at the heart of so many expressions of support or opposition from these executives. Graham-Cassidy leaves Obamacare’s core regulations untouched, though it provides generous waiver provisions that could gain favor in a few states. Like past efforts, the legislation zeroes out only a few of the law’s worst-received components: its individual and employer mandates, and a few of its taxes. Much of everything else boils down to cash; in keeping with a recent push from conservatives, the bill also converts Medicaid financing into a per capita model, capping the amount an enrollee can receive by state and growing it at various measures of inflation, depending on the category of beneficiary (i.e., elderly, non-elderly).
The last time Medicaid figured so prominently in a health reform fight, Republicans fell short. But there’s still discomfort with the status quo inside the party that’s giving Graham-Cassidy a shot.
“I’m studying it. I think most anything would be better than Obamacare,” South Carolina governor Henry McMaster said Monday.
