Blog Posts > Cassidy-Graham is the Latest Attempt to Take Away Healthcare Coverage from Thousands of West Virginians
September 15, 2017

Cassidy-Graham is the Latest Attempt to Take Away Healthcare Coverage from Thousands of West Virginians

The latest attempt to repeal the Affordable Care Act, the Cassidy-Graham bill, would cut West Virginia’s funding for Medicaid by $2.0 billion by 2027. This would undermine health coverage for tens of thousands of West Virginian’s and threaten the state’s historic gains in health coverage stemming from the Affordable Care Act.

The Cassidy-Graham bill cuts health coverage in two main ways.

Block Grants are no replacement for ACA provisions.

The biggest cuts in the Cassidy-Graham bill come from converting the ACA’s Medicaid expansion and marketplace subsidies with smaller, temporary block grants. According to the bill’s sponsors, this block grant would give states “flexibility,” allowing them to maintain the coverage available under the ACA, if they wanted to do so while enabling other states to experiment with alternative approaches. In reality, however, states would not be able to maintain their coverage gains made under the ACA, because the block grant funding would be an insufficient amount to maintain coverage levels equivalent to the ACA. The block grant would provide $239 billion less between 2020 and 2026 than projected federal spending for the Medicaid expansion and marketplace subsidies under current law.

In 2026, this funding would completely go away, leaving states with 100 percent of the cost for the people covered under these programs. This cut would almost certainly leave states no choice but to discontinue these kinds of coverage. The result is that, beginning in 2027, Cassidy-Graham would be virtually identical to a repeal-without-replace bill — except for its additional Medicaid cuts through the per capita cap, described below. The non-partisan Congressional Budget Office (CBO) estimated that the repeal-without-replace approach would ultimately leave 32 million more people uninsured. The Cassidy-Graham bill would presumably result in even deeper coverage losses than that in the second decade.

A permanent and ongoing cut to traditional Medicaid

Like prior House and Senate Republican repeal bills, the Graham-Cassidy bill would radically restructure and cut the rest of Medicaid, outside of the ACA’s Medicaid expansion. It would end the federal-state financial partnership under which the federal government pays a fixed percentage of a state’s Medicaid costs. It would instead impose a per capita cap, under which federal Medicaid funding would be capped at a set amount per beneficiary, irrespective of states’ actual costs, and would grow each year more slowly than the projected growth in state Medicaid costs per beneficiary.

The result would be deep cuts to federal Medicaid spending for seniors, people with disabilities, families with children, and other adults (apart from those affected by the bill’s elimination of the Medicaid expansion). Notably, these per capita cap cuts would come on top of the cuts to Medicaid expansion funding and marketplace subsidies under the block grant discussed above.

Starting in 2025, the annual adjustment of per capita caps is reduced to an even lower level, creating even deeper cuts to Medicaid. In 2027, after the block grants disappear and Medicaid per capita caps are further reduced,  combined would result in a $2.042 billion federal funding cut for West Virginia.

Cassidy-Graham's Large Cuts to Federal Health Care Funding Grow Even Larger Starting in 2027

Disruptions to the individual markets

In addition to hurting healthcare coverage through major Medicaid cuts, Cassidy-Graham would also disrupt the individual market. The Cassidy-Graham bill would immediately eliminate the individual mandate requiring everyone to have some kind insurance coverage or else pay a fine, which the Congressional Budget Office estimated would result in 15 million more uninsured in the following year.

The bill’s elimination of the ACA marketplace subsidies and start of a block grant in 2020 would cause massive additional disruption. States would lack guidance, standards, or administrative infrastructure for creating their own coverage programs, and insurers would have no idea how the individual market would operate, including what their risk pools would look like. Insurers would most almost certainly impose large premium rate increases to account for uncertainty; some would likely exit the market altogether.

Then in 2027, when the block grant disappeared entirely, insurers would face a market without an individual mandate or any funding for subsidies to purchase coverage in the individual market. Yet they would still be subject to the ACA’s prohibition against denying coverage to people with pre-existing conditions or charging people higher premiums based on their health status. Many insurers would likely respond by withdrawing from the market, leaving a large share of the population living in states with no insurers, as CBO has warned about previous repeal-without-replace bills.


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