Here’s The Skinny On GOP’s Revised Plan To Reform Health Care

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Robert Donachie Capitol Hill and Health Care Reporter
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GOP Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana released their revised bill Monday to repeal major features of Obamacare and fundamentally change the program’s funding mechanism.

Graham and Cassidy, along with Republican Colleagues Sens. Dean Heller of Nevada and Ron Johnson of Wisconsin, are angling to win the support of conservative and moderate senators in their own party who remain on the fence or were outright opposed to the first iteration of the GOP’s eleventh-hour push to upend the American health care system.

The Republican holdouts thus far include: Sens. John McCain of Arizona, Lisa Murkowski of Alaska, Susan Collins of Maine, Rand Paul of Kentucky and, most recently, Ted Cruz of Texas and Mike Lee of Utah.

Republican senators have until Sept. 30 to pass Graham-Cassidy under the Senate’s budget reconciliation rules, which allows leadership to pass a bill with only 50 “yes” votes and bypasses filibusters from Democrats. After Sept. 30, the Senate would be pursuing Obamacare repeal through regular order, which would provide a few significant obstacles for the small 52 seat Republican-held majority, like Democratic filibusters and a 60 “yes” vote threshold.

Senate leadership has only been able to garner between 45 and 49 votes behind an Obamacare repeal proposal in the first 8 months of President Donald Trump’s first year in office.

The new bill provides a number of concessions to the current holdouts, and institutes a number of repeals, changes and amendments to Obamacare. Graham and Cassidy are hoping these will suffice.


– Repeals Individual Mandate
– Repeals Employer Mandate
– Repeals the Medical Device Tax.
– Ends Obamacare Subsidies (Cost-Sharing Reductions) and the program entirely as of Dec. 31, 2019.
– Removes the definition from Qualified Health Plans (QHPs) that provides coverage for abortions (except if necessary to save the life of the mother or if the pregnancy is the result of rape or incest), beginning in the tax year (2018).
– Repeals Obamacare premium tax credits as of Jan. 1, 2020.
– Repeals small business health insurance tax credit starting Jan. 1, 2020.
– Repeals the tax on Over-the-Counter Medications.
– Repeals the tax on health savings accounts (HSAs) and increases the maximum contribution limit for HSAs. Spouses would also be able to contribute “more than the annual contribution limit for family coverage” to their “respective HSAs.”

How The New Block Grant Funding Works At A Glance

The program institutes a block grant funding mechanism starting in 2020 that would run through 2026. The block grant program would start with a pool of $136 billion in 2020 that would grow to $200 billion in 2026. The program requires a state to submit an application to the Center for Medicare and Medicaid Services Administrator to receive federal funding.

Under this bill, states have a great number of options in how they wish to allocate these funds. For example, the bill lists establishing or keeping the Obamacare program to help high-risk individuals purchase health benefits coverage. Such a provision would likely include programs to reduce health insurance premiums, a significant problem for consumers under the current health care system.

One odd thing is it looks like the new Graham-Cassidy repeals Obamacare subsidies but encourages states to “provide health insurance coverage by funding assistance to reduce out-of-pocket costs (copayments, coinsurance, and deductibles).” On the one hand, the bill ends the CSR program in 2020, but it appears to acknowledge the importance that these subsidies have on market stability.

States must prove in their application how they plan to use the block grant funds for “allowed activities.” States have to illustrate how they will maintain “access to adequate and affordable health insurance coverage for individuals with pre-existing conditions.” In what appears to be an efficiency requirement, states must also show that they will not reappropriate the funds for the financing of “non-federal share of expenditures for any other program.” States must also prove they will provide coverage for mental health services.

It appears that under Graham-Cassidy, Health and Human Services Director Tom Price would have significant leeway in how the block grant allocation formula works.

“Not later than July 31, 2021, the Administrator shall develop a State specific population adjustment factor that accounts for legitimate factors that impact the health care expenditures in a State beyond the clinical characteristics of the low-income individuals in the State. Such factors may include State demographics, wage rates, cost of care, income levels, and other factors as determined by the Administrator,” the bill reads.

Will These Changes Be Enough?

Murkowski’s home state of Alaska is one of the costliest under Obamacare, as it has a sprawling population with a lot of low-density areas. Under the original version of Graham-Cassidy, Alaska could see as much as a $1 billion cut to the state’s federal health care funding from 2020 to 2026, according to research from consulting firm Avalere. That would work out to roughly a $1,350 cut per resident.

Alaska appears to get more money under the revised bill, but Murkowski is still signaling she may vote against the bill.

“I am insisting that there are elements of the ACA that must be saved, that must be preserved. For example, we must continue to prohibit insurers from discriminating against pre-existing conditions … as long as this Legislature wants to keep (Medicaid) expansion, Alaska should have the option — so I will not vote to repeal it,” Murkowski told reporters.

McCain will still likely be a “no” vote on Graham-Cassidy because the bill is not going through regular order.

“I cannot in good conscience vote for the Graham-Cassidy proposal. I believe we could do better working together, Republicans and Democrats, and have not yet really tried,” he said in a statement Friday.

“Nor could I support it without knowing how much it will cost, how it will effect insurance premiums, and how many people will be helped or hurt by it. Without a full CBO score, which won’t be available by the end of the month, we won’t have reliable answers to any of those questions,” McCain said.

A spokesman for Paul said the senator is opposed to Graham-Cassidy 2.0, despite the bill’s revision and the fact that it increases funding to his home state of Kentucky.

Paul told The Daily Caller News Foundation last week that he does not support either the Graham-Cassidy bill or the bipartisan proposal that was expected, until its recent withdrawal, to make its way out of the Senate HELP Committee.

Collins has not yet said she is willing to support the recently revised bill but said she was a no Sunday.

If McCain, Murkowski, Collins and/or Paul vote no, Graham-Cassidy is dead.

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