Sen. Bill Cassidy, R-La., made several statements about his and Sen. Lindsey Graham’s, R-S.C., health care bill that seemed worthy of some fact-checking. Below are four assertions and our explanations for them based on conversations with health care experts.
FACT CHECK: The Graham-Cassidy bill would scrap the individual mandate requiring people to buy insurance -– the crux of Obamacare which is so anathema to its opponents –- meaning people would no longer be penalized for not having insurance.
James Capretta, a fellow with the right-leaning American Enterprise Institute, told ABC News the absence of the individual mandate means Graham-Cassidy is “highly, highly unlikely” to cover more people than current law.
“Absent other changes it’s likely this kind of approach would encourage and provide an incentive for healthy people to stay out of the market as long as possible and get back only when they need it,” he said.
But even if the highly unlikely scenario of covering more people did happen, other experts note that increasing the number of people who are covered doesn’t mean much if their policies don’t cover much.
“States could provide a lot more people with insurance cards in their pocket, but that’s not the same as saying there’s as much coverage as there is today,” Karen Pollitz, a senior fellow at the Kaiser Family Foundation, told ABC News.
Besides the individual mandate, another big variable between the Graham-Cassidy plan and existing law is that the Republicans’ proposal allows states to waive existing requirements, like certain essential health benefits and prohibitions on charging people with pre-existing conditions more, as long as they describe to the secretary of Health and Human Services, who would make the determination, “how the state intends to maintain access to adequate and affordable health insurance coverage for individuals with pre-existing conditions.”
That’s much weaker language than in the Affordable Care Act, which does allow states to request waivers from requirements under a narrow program but requires them to ensure health care that is “as comprehensive and affordable as would be provided absent the waiver,” which Pollitz said is a much more powerful enforcement mechanism.
Matt Fiedler, a health care policy fellow at the Brookings Institute, agreed and said the bill explicitly allowed states to get waivers so that insurance companies could rate patients differently depending on “previous health status.” Fiedler referred to the “adequate and affordable” line in the bill as “toothless.”
“The federal government does not appear to have any authority to reject waivers, so states can do essentially whatever they want as long as there is a section on their application materials that pays lip service to this point,” he wrote to ABC News in response to questions about the bill. “Even if there were some ability for the federal government to meaningfully enforce this requirement (and an administration interested in doing so), the term ‘adequate and affordable’ is quite vague and elastic. That would make denying an application on these grounds hard.”
James Capretta of AEI noted that it’s possible fewer states than expected might request waivers that have the effect of scrapping protections for pre-existing conditions because those protections are one of the popular aspects of the Affordable Care Act.
“States are allowed to come forward with waiver requests and waivers can be granted but the politics are not easy on a state level,” he said.
The Affordable Care Act’s waiver program, known as Section 1332, was specifically geared toward states that wanted to employ “innovative strategies for providing their residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA,” according to the Centers for Medicare and Medicaid. Those basic protections include the essential health benefits and protections against charging more for pre-existing conditions.
In response to questions about the waiver program in his bill, a Cassidy aid told ABC, “It is fair to point out that states can already approach coverage of people with preexisting conditions differently through the 1332 waiver process. Graham-Cassidy merely adds another route through which states can apply for waivers to address the insurance needs of their populations, which they are far better situated to do than the federal government.”
FACT CHECK: There are two issues with this assertion: First, there does not seem to be any language requiring waiver-seeking states to meet these criteria. Second, the criteria itself is open to subjective interpretation.
The bill does contain, as mentioned previously, a requirement that states describe to the HHS secretary how the states plans to maintain “adequate and affordable” coverage for individuals.
“Every insurer must offer every individual a plan, and ensure each patient with pre-existing conditions has access to ‘adequate and affordable health insurance coverage,’” the Cassidy aide said, pointing to the language in the bill that requires a “description” of “how the state intends to maintain access to adequate and affordable,” which is a weaker requirement than that described by the aide.
The bill also contains no metrics for determining whether the state is following through on the explanations sent to the HHS secretary, nor is there a set definition for “adequate and affordable,” so that interpretation can be left up to the discretion of the HHS secretary.
“All in all, it looks to me like Republicans are absolutely determined to do something they can call repeal and replace, even if what they’re doing is somewhat incoherent,” Capretta said.
FACT CHECK: In response to the concern about people with pre-existing conditions, Cassidy also posited the fact that the block grants issued to states will be funneled through the existing Children’s Health Insurance Program (CHIP) which currently helps states provide health insurance for low-income children.
The comment left several experts scratching their heads.
“CHIP does not regulate insurance markets, so it has nothing to do with regulating where a state ends up on pre-existing condition,” Joan Alker, a research professor at the Georgetown University McCourt School of Public Policy told ABC News.
And while it is true that states are already in the habit of using the CHIP program, Alker pointed out that unlike current Medicaid funds, which are entitled to states and individuals on a long-term basis, CHIP money has to be reauthorized by Congress each year.
“Frankly the fact that CHIP money is about to expire on Sept. 30 and Congress has not extended it is ‘exhibit A’ as to why CHIP is not a good model. The Medicaid model is entitlement money, it is guaranteed funding for states,” she continued.
“Sen. Cassidy is just not telling the truth.”
FACT CHECK: This assertion needs to be fully unpacked in order to understand the full context.
The reason why Cassidy mentioned individual states is because his bill changes the way states receive money to run their health care systems and help people pay for care, giving states more discretion with health care funds, but fewer actual dollars.
A handful of states, including Texas and two of the states Cassidy mentioned – Virginia and Missouri – would in fact end up with a net increase of funding over 10 years, according to a study by the policy analysis group Avalere. But overall, the study found that most states would end up with a net loss of federal funding versus current law.
Obamacare-era tax credits, subsidies and Medicaid expansion dollars would be eliminated. Instead, states would receive block grants of money to allocate as they determine. The states that accepted the Obamacare Medicaid expansion would see that money go back into the general pot of funding, the allocation of which depends on a complicated formula that factors in population size and resident wages, and states would not have to spend money to increase health insurance coverage. Graham-Cassidy block grants would expire in 2026.
But the point is that most states would receive less federal funding because there would simply be less funding to go around and because the funding formula changes so much. States that accepted the Medicaid expansion stand to lose the most, including blue New York and California, but also Ohio and Alaska, both of whose Republican governors oppose the bill, and Maine, which Cassidy still mentions as a relative winner despite the fact that it is a Medicaid expansion state and would stand to lose $1 billion, according to Avalere.
So while a few non-Medicaid expansion states might see more federal funding than they have under the Affordable Care Act, the net result is a decrease in federal funding — $215 billion to be exact, according to Avalere’s study.
“In general, the states who expanded Medicaid over the long run are the losers under this formula, because the formula tries to normalize funding per person across the states,” Fiedler said. “That comparison is a little funny because the non-expansion states had the option to expand and chose not to. The argument there is an inequity under current law I find a little bit puzzling.”