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Graham-Cassidy-Heller-Johnson ACA Block Grant Proposal Introduced

September 13, 2017

Four U.S. Senators have attempted to revive the effort to repeal and replace the Affordable Care Act (ACA) through the introduction of a new bill that would repeal much of the ACA and provide a block grant of health care funding to states.

The ACA legislation put forth by U.S. Senators Lindsey Graham (R-SC), Bill Cassidy (R-LA), Dean Heller (R-NV) and Ron Johnson (R-WI) marks a final attempt by Senate Republicans to repeal and replace the ACA under an expedited legislative process. The Senate parliamentarian ruled that "reconciliation" instructions which allow the Senate to repeal the ACA by a majority vote will expire after September 30.

The Senate sponsors are pushing for a hearing on the legislation in order to set the stage for consideration of the bill before the end of the month but prospects remain uncertain.

The Graham-Cassidy-Heller-Johnson proposal would repeal the individual and employer mandates, and replace premium tax credits, cost-sharing reduction payments, and enhanced funding for the Medicaid expansion by 2020 with block grants to the states. 

The block grants would be calculated using a per capita cap and funding could be used for health care services, including:

  • Helping high-risk individuals purchase health benefits
  • Market stabilization efforts through stabilizing premiums and promoting market participation
  • Providing payments to health care providers
  • Offering assistance for out-of-pocket costs
  • Helping individuals purchase health benefits coverage

The formula description to calculate the block grants is based on a number of factors including the size of its eligible population, state demographics and population characteristics, and some cost factors. The formula is budget neutral among states, which means there will be significant redistribution—generally favoring states that did not expand Medicaid. 

The overall formula is expected to reduce Medicaid and other health spending by hundreds of billions of dollars.

In light of the significant fiscal impact of the proposal—both with respect to the amount of funding provided through the block grant, and the redistribution between states—an initial review raises serious concern.

HAP continues to advocate that repeal of the ACA must be coupled with an adequate replacement plan; and place a priority on ensuring access to care for more than 1.1 million Pennsylvanians that have benefited from coverage as a result of the ACA, and the protections that comprehensive coverage has afforded to millions of Pennsylvanians.

Please contact Laura Stevens Kent, vice president, federal advocacy, or Jeff Bechtel, senior vice president, health economics and policy, for more information.

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