Graham-Cassidy analysis shows billions in federal funding losses for Colorado's health care programs

Posted at 12:03 PM, Sep 20, 2017
and last updated 2017-09-21 00:25:27-04

DENVER – Senate Republicans’ latest effort to repeal and replace the Affordable Care Act would quickly cost Colorado at least $6 billion in federal funds, and could end up taking $78 billion from the state in the long-term, according to new analysis out Wednesday.

The Graham-Cassidy amendment, named after its writers, Sen. Lindsey Graham, R-S.C., and Sen. Bill Cassidy, R-La., has until Sept. 30 to pass the Senate with a simple majority vote.

Afterward, due to parliamentary rules, the Senate would need 60 votes to pass a repeal-and-replace measure.

The Congressional Budget Office has said it won’t have enough time to do a full analysis of the amendment before it’s brought to the floor, which Senate Majority Leader Mitch McConnell said Wednesday would likely happen next week. So other organizations are stepping in to try and analyze the amendment before a possible vote.

Avalere Health, an independent analysis organization, took a look at Graham-Cassidy and published its results Wednesday.

Graham-Cassidy would take the federal money that goes into the premium subsidies and Medicaid expansion pools created by the ACA, and put them into a single pool while putting a per capita cap on Medicaid starting in 2020. That pool would be converted to block grants that would be sent to the states to help them subsidize those programs.

But the grants expire in 2026. Proponents of the measure say that Congress would re-appropriate more money to kick in starting in 2027, but as the proposal is written, there is no guarantee that money would come back.

Avalere’s analysis looked at the measure as-is, without theorizing what money might be re-appropriated after the changes to the ACA are made.

The analysis gives more context to a spreadsheet that Cassidy has been showing fellow senators in attempts to win them over, which show spending levels in 2020 and 2026.

Cassidy’s spreadsheet shows Colorado would see a 2 percent federal spending increase under his proposal, but it fails to account for the rising costs of health care compared to inflation, and doesn’t show the post-2026 effects the amendment would have if more funding isn’t put together in Congress beyond the expiration of the block grants.

Avalere’s analysis accounts for both things. It shows that overall, when compared to current law, funding from the federal government to the states would be reduced by $215 billion between 2020-26.

Colorado would see a $6 billion reduction in federal funding between those years, while many of the surrounding states that opted not to expand Medicaid under the Affordable Care Act—including Oklahoma, Kansas, South Dakota, Wyoming and Utah—would all see increases in federal funding.

“The largest impact of the proposed bill would be the reallocation of federal dollars between states,” said 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.”

And since no funding is guaranteed beyond 2026, the loss in federal funding forecasted by Avalere explodes from there—which would be exacerbated by a lowering of the per capita cap in Medicaid spending that kicks in in 2025.

Avalere forecasts an $11 billion loss in federal funding for Colorado when 2027 is factored into the 2020-26 numbers. It would be one of 18 states seeing federal funding reductions of more than $10 billion over that seven-year period, according to Avalere.

At that point, the 11 states seeing funding increases over that time period would all be states that have so far opted not to expand Medicaid under the Affordable Care Act.

“The bill creates a financial incentive for states to direct coverage to very low-income residents near or below the poverty line, potentially at the expense of lower-middle-income individuals who currently receive exchange subsidies,” said Chris Sloan, senior manager at Avalere.

And Avalere’s forecast says that with no funds committed beyond 2026, the health care situation would be dire. Every state would see a reduction in federal funding when compared to current law, and Colorado would see a total of $78 billion less between 2020 and 2036 than it would under current law.

“The largest negative funding impacts of this bill to states are outside the current 10-year budget window,” Sloan said.

Avalere says that traditional Medicaid recipients would also be negatively-affected, as lower growth rates kick in after 2024, which Avalere says would trend toward severe cuts to spending over the decade that follows.

In total, under Graham-Cassidy, Avalere forecasts a cumulative change in federal funding to U.S. states of $4.15 trillion between 2020 and 2036.

Bennet against measure, while Gardner still “analyzing”

Bennet pointed out the Avalere analysis on Twitter Wednesday, a day after he blasted Graham-Cassidy in a statement:

“I can’t decide whether this is Groundhog Day or the definition of insanity: every attempt is worse than the last,” Bennet said. “This latest version cuts nearly $1 billion in funding to Colorado, sets up a nonsensical cliff in coverage, and puts patient protections at risk. The bipartisan process in our committee was making progress. Why would we abandon it now? This is exactly why Coloradans have lost so much faith in Washington.”

Bennet’s fellow senator from Colorado, Republican Cory Gardner, is analyzing the proposal and “any other proposals that look at ways to improve our nation’s health care,” his spokesman, Casey Contres, told Denver7 Monday.

A request for more insight from Gardner made Wednesday to Contres has so far not been returned. He told the Denver Post Wednesday he was “trying to get some more information” on Graham-Cassidy.

Medical organizations oppose, key Republicans still undecided

Cassidy pushed back against Jimmy Kimmel Wednesday, who used his late-night show Tuesday to slam the senator for being “dishonest” about health care.

He said his measure indeed passed the “Jimmy Kimmel Test” that he essentially coined earlier this summer, saying health care shouldn’t prevent people from getting coverage.

Rep. Ed Perlmutter, D-Colo., sided with Kimmel and said Cassidy's measure failed the test.

Bloomberg reports that the bill has a vague provision that requires a state to show how it “intends to maintain access to adequate and affordable health insurance coverage for individuals with pre-existing conditions,” which Cassidy says ensures protections.

But the Blue Cross Blue Shield Association became the latest major medical organization to voice its opposition to the bill Wednesday, when it said Graham-Cassidy would “undermine safeguards for those with pre-existing medical conditions.”

The American Medical Association, AARP, American Heart Association and American Lung Association are among the other organizations that have opposed the measure.

Colorado Gov. John Hickenlooper and his band of bipartisan governors have also opposed the measure and called for regular order in the Senate’s crafting process.

Sen. John McCain, R-Arizona, says he is still unhappy with the lack of “regular order” but has stopped short of saying he wouldn’t support the measure. He cast the deciding vote against the Senate’s previous repeal-and-replace attempt, the BCRA.

Sen. Lisa Murkowski of Alaska is also uncommitted to the measure, and also voted against the BCRA.

Senate Republicans have 52 members in the Senate and can only lose two of those votes. Maine’s Susan Collins has hinted that she wouldn’t support Graham-Cassidy, as has Kentucky’s Rand Paul.

The Colorado Health Institute's 2017 health access survey released Tuesday showed the Affordable Care Act has greatly reduced the number of uninsured people in Colorado, and that many of those who received Medicaid under the expansion or became insured under the ACA were generally pleased with the program.