• Daniel Ethan Finneran

Graham-Cassidy Bill Heads to the Senate Floor

September 2017

The Senate has embarked on its latest and, if we can hope to be so lucky, last attempt to repeal and replace the Affordable Care Act. Named uninspiringly the “Graham-Cassidy Healthcare Bill” (it would appear as though, at this point, the senate has been bled of its ability to conceive creative nicknames), it will be Congress’s fourth attempt to both nullify and substitute Obama’s eponymous 2010 healthcare law with something altogether new. Leading the charge and lending their names to this newest bill are Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA). With the help of Senators Dean Heller (R-NV), Ron Johnson (R-WI), and former Pennsylvania Senator and two-time presidential candidate, Rick Santorum, the group is determined to push through with a final thrust a piece of legislation that sticks.

These four horsemen of the senate, with the addition of an alumnus in Santorum, have worked to craft a bill that might prove itself palatable yet. It’s well-known that all foregoing attempts to deconstruct Obamacare have failed. This Graham-Cassidy bill will be the fourth attempted in nearly as many months. It was during the waning days of spring when the House of Representatives first proposed what came to be its ill-fated “American Health Care Act”. After initially being struck down on the floor, it found itself later re-introduced to a more receptive crowd. For its cause, it won enough votes (by the slimmest of margins) and was able to proceed from the House of Representatives to the Senate. There, under Majority Leader Mitch McConnell’s direction, it was altered in various ways. Large swaths of the House’s proposals were cast aside in favor of improvements thought better of the Senate.

As such, McConnell begot the “Better Care Reconciliation Act” in late June and it was brought to the floor thereafter in July. It failed in a 43-57 vote, a frustrating end to an issue that had become the nation’s summertime cause célèbre—debated from every water cooler to every barbeque grill. Reeling in their lost opportunity, a few Republican senators regrouped to attempt again a last-ditch effort for a legislative win. At month’s end, in late July, senators voted on the slightly modified “Health Care Freedom Act”. This penultimate measure, named “skinny repeal”, for its piece-meal approach, died of emaciation when Senators Lisa Murkowski (R-AK), Susan Collins (R-ME), and John McCain (R-AZ) withheld their votes. Pertinaciously, the three Republicans stood against their party line to ensure this bill’s demise. It was during this vote that McCain cast his dramatic, crepuscular thumbs-down that ultimately sent skinny repeal to its grave.

But like an importunate Lazarus, whose resuscitation is less impressive each time he breathes anew, the Senate’s Obamacare-repeal bills won’t die. Republicans are now touting the Graham-Cassidy Bill, which is set to stand for a vote at any moment in time this week. Concisely put, the Graham-Cassidy Bill seeks to dismember the ACA, condense all the federal funds it provided into one pot, reduce the size of said pot, and dole this lump sum of money out to the states. The states would then have the unprecedented discretion to allocate the money to those beneficiaries most deserving or in need. Relying on the issuance of block grants, the states and not the federal government would begin responding more directly to their own citizens’ healthcare needs.

If implemented, the Graham-Cassidy bill would see the federal government loosen its exclusive license on Medicaid standards and services, which would then be transitioned to the states. Important to note is that Medicare (which is an altogether separate entity from Medicaid—the former dealing less with the indigent and more with the geriatric) would not be immediately affected. In overseeing the distribution of healthcare dollars through Medicaid, the onus would fall squarely upon the states. Unmolested by the bureaucratic strictures of Washington D.C., this would hand to the states the control of healthcare markets they’ve long sought. Now, it becomes theirs and not the federal government’s decisions to set terms for their beneficiaries (or those at the receiving end of Medicaid’s expenditures) and to fund the program affectively.

It would provide states with the ability to opt out of the ACA root and branch, or to keep any number of regulations that they’ve come to find useful. In this way, the Graham-Cassidy bill is amenable to each state’s particular desires. To achieve the best healthcare outcomes at the cheapest prices, such a state could forsake the ACA completely, retain it entirely, or conserve whichever portions best suited to their ends. The theme of the bill was put best and perhaps most sardonically when Vice President Pence said that “If you like your Obamacare insurance, you can keep your Obamacare insurance”. This tongue-in-cheek reference to President Obama’s promise about keeping one’s doctor sums up well that which would be the states’ prerogative under the Graham-Cassidy Bill.

This bill’s potential appeal to local and state governments lies not only in its repeal of Obamacare. More than that, it breathes life into the all-but forgotten idea of federalism, wherein the state has some sense of agency and determination of its fate. Simply, it gives the state the opportunity to choose and removes the compulsion to fall in line.

Given this choice, it’s likely that the politically unpopular but financially essential “individual mandate” of Obamacare would become a thing of the past. As it stands, the ACA mandates that all eligible Americans, or all those uncovered by Medicare or Medicaid, purchase health insurance either within or without the Obamacare marketplace. Resentment and contestation to this aspect of the law was fervid. This, after all, is a country of liberality and of the freedom of choice, not of edict and obedience. Nevertheless, having seen its day in the Supreme Court, the ACA’s legality was upheld under the Commerce Clause—now a blanket resort for any issue. Individual rights enthusiasts and younger, healthy Americans bristled against the mandate and its having been ruled constitutional. After all, the mandate was constructed not for a younger American’s benefit. It was to be his unwitting subsidization of his elderly kin that would keep the program afloat.

The McConnell bill nominally scrapped the individual mandate, but placed in its stead a fine for any person trying to obtain insurance after a six-month coverage lapse. By any other name, this fine amounts to a mandate. Improving on that is the Graham-Cassidy Bill. The latter dismisses both Obama’s mandate and McConnell’s “fine”, so long as the interested state deems them superfluous. If not, the state could just as quickly impose them. It would become a provincial decision.

To forgo the mandate would be to change the entire process by which insurance companies and, by extension, healthcare providers are compensated for their service. In negotiating with insurance companies, states could allow the insurance companies to charge up to five times more for the coverage of an elderly individual than a younger person. People tend to bristle at the mere idea of this, thinking it predatory, exploitative, or blatantly gerontophobic. They think it an avaricious grab of our elders’ wallets by wealthy healthcare executives, but it’s nothing more than a centuries-old matter dollars and cents. The issue, if one is to think of it as such, ineluctably boils down to risk. Of course, insurance companies must be allowed to charge their older clients higher premiums to account for their policy-holder’s increased risk.

A nonagenarian, it’s clear, carries with him far more risk of ill health (and thus a costly hospital tab) than does a twenty-something year-old in the vigor and verve of his youth. In one’s dotage, one pays more than in one’s nonage, and this is the only economically sensible approach. An insurance policy, whether it be for health, flooding, or a vehicle, works in the same way. All are produced from an evaluation of risk. Much like an opulent home built along the beach or a lead-footed motorist driving a Ferrari should expect to pay more because of their heightened risk of damage and injury, the pricing of healthcare should reflect one’s risk. In an open market, those of us more liable to maladies will pay more for protection. Those less prone, will pay less.

The ACA attempted to adjust this calculus so that older individuals could be charged only three times as much as younger people. Possibly, in the future, this may well remain a viable option. As the Graham-Cassidy Bill points out, the state is the ultimate arbiter about the factor of three or five. The state will decide by just how much more grandma will be charged than granddaughter.

These are some of the biggest implications of the Graham-Cassidy Bill. There are others, including a freeze on Medicaid’s reimbursement for Planned Parenthood for at least one year, diminished access to cost-sharing reductions, and new definitions for what counts as an essential health benefit. The bill would also compel states to reconsider implementing high risk pools. Prior to the ACA’s adoption, thirty-five states offered these pools. Their purpose was to group together and subsidize the costly care of chronically sick people beset with various co-morbidities. These pools were unnecessary under the ACA because those who met the “high-risk-pool” criteria were automatically guaranteed health insurance, irrespective of their pre-existing conditions. If pre-existing conditions are no longer covered universally, the high-risk pool will step in to subsidize the inflated premium an insurance company is likely to charge.

The Graham-Cassidy Bill also provides more laxity for health savings accounts. Republicans have long touted this approach as a way to shift the status quo and potentially save a buck in the process. It would transition us from a system heavily reliant on governmental largesse to one that emphasizes individual frugality. In a word, the health savings account is a personal tax-exempt fund that can be allocated specifically for one’s medical care. Essentially, it is an untaxed investment in oneself. The ACA constricted how much an individual could contribute to the account in a given year. The numbers have yet to be released, but the Graham-Cassidy bill will doubtless allow individuals to contribute more to their health savings accounts than did the ACA, a boon for the free market and for the lost concept of personal responsibility.

Succinctly put, under the Graham-Cassidy Bill, states henceforth will be able to decide what they want to do with healthcare within the confines of their borders. Surely reason to cheer for the newfound spirit of self-determination, this comes at a cost; the states will have less money from the federal government to fund Medicaid. In exchange for the old prodigality of the federal government, the states will win their liberty. Unless, like so many before it, this proposed bill doesn’t pass. Then, it’s back to square one.

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