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U.S. Senator Lindsey Graham, a co-sponsor of the 2017 Graham-Cassidy Amendment, speaking in Des Moines, Iowa in 2015. Photo courtesy of Gage Skidmore/Flickr

The Graham-Cassidy Bill Would Cost Colorado—Big Time

The last-ditch attempt by Congressional Republicans to repeal the Affordable Care Act would cost the Centennial State billions in federal funds.

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Congressional Republicans are once again fast tracking a last-ditch effort to repeal to the Affordable Care Act (ACA). The bill, known as the Graham-Cassidy Amendment, could be voted on in the Senate next week. This time, the repeal could cost Colorado billions in federal funding, while imposing a tremendous burden on the state to completely transform health coverage in less than two years.

The Graham-Cassidy bill ends funding for ACA provisions that gave more Americans access to health insurance by expanding Medicaid eligibility and providing marketplace subsidies to make private insurance more affordable. The legislation then goes a step further by capping federal spending for the traditional Medicaid population that existed before the ACA, which insures low-income children, pregnant women, seniors, and individuals with disabilities.

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Graham-Cassidy offers a temporary replacement for the ACA by providing flexible block grants for states that will last through 2026. The block grants give states tremendous leeway in how they finance coverage, including the option to end coverage of essential benefits such as hospital care, mental health services, and maternity care. They also allow states to essentially opt-out of covering preexisting conditions for any current or past health status.

But the block grants are not divided evenly. Instead, the Graham-Cassidy bill takes money away from Colorado and 33 other states that did the work to expand Medicaid or insurance coverage, and redistributes those funds to 16 primarily Republican states that refused the expansion prescribed by the Affordable Care Act in 2012.

From 2020 to 2026, the Graham-Cassidy bill cuts federal funding to states by $215 billion, with Colorado losing $6 billion, according to Avalere Health, a Washington D.C.-based healthcare consulting firm. In contrast, South Carolina and Wisconsin—home states of the GOP Senators co-sponsoring the legislation—each gain $3 billion.

A $6 billion cut in federal funds would be “devastating across the board” for Colorado, said state Deputy Insurance Commissioner Michael Conway. “There is no amount of flexibility that can make up a $6 billion hole created over six years,” he added. “It’s just not feasible.”

The funding cuts increase after the block grants expire. From 2020 to 2027, federal funding to states could plummet $489 billion, including an $11 billion loss for Colorado, Avalere reports. Over 20 years, funding cuts could reach $4 trillion.

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The Congressional Budget Office aims to have a preliminary analysis of Graham-Cassidy in the next few days, but says it won’t be able to calculate the impact on insurance coverage and premiums for several weeks. Together, the block grants and cuts to traditional Medicaid funding affect coverage for over 80 million Americans, reports the Kaiser Family Foundation.

In Colorado, expanding Medicaid eligibility and providing subsidies under the ACA created a drop in uninsured citizens to 6.5 percent in 2017, down from 14.3 percent in 2013, according to the Colorado Health Institute’s 2017 report on the Colorado Health Access Survey (CHAS). Today, over 5 million people in Colorado are insured, including one in five who is on Medicaid.

About 400,000 Coloradans joined Medicaid through the ACA’s expansion. Under current law, the federal government pays about 95 percent of the coverage costs for Colorado’s expansion population. Another 8 percent of Coloradans buy insurance on the individual market, where premiums are set to rise by an average of 27 percent in 2018, according to the survey. Western Slope residents are the most likely to use individual markets, and could be hit hardest by the loss of subsidies.

In addition to hundreds of thousands of Coloradans losing insurance coverage, and billions lost in federal funding, Colorado could also lose its tremendous investment in implementing the ACA, expanding Medicaid coverage, and creating a state-run health insurance marketplace. “One of the many problems with Graham-Cassidy is that it just throws all that work out the window,” Conway said.

The legislation also ignores many trickle-down impacts of Colorado’s Medicaid expansion, he added, including healthier citizens, a reduction in uncompensated care in hospitals, and a significant drop in medical bankruptcies from about 100,000 per year to 40,000 per year, he added.

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Graham-Cassidy also requires states to take on the daunting task of creating entirely new health coverage programs in under two years. State officials would have a March 2019 deadline to submit applications to the federal government for coverage programs that start in 2020, Conway said. That gives lawmakers less than two legislative sessions to make difficult decisions about who gets coverage under the state’s reduced funding—and how to administer those policies. “It’s a really tall task,” Conway said.

So far, insurers, providers and patient health organizations all oppose the bill, including the American Medical Association, AARP, Blue Cross Blue Shield Association, Planned Parenthood, Kaiser Permanente, America’s Health Insurance Plans, the American Cancer Society, and the bipartisan National Association of Medicaid Directors and Colorado Hospital Association. Conway says the consensus is notable. “Both the provider groups and the insurance groups are coming out full barreled against this legislation,” he said. “If they can agree that a particular piece of legislation is a bad idea, it’s spectacularly disastrous legislation.”

Colorado Gov. John Hickenlooper and a bipartisan group of nine other governors asked the Senate on Tuesday to drop the Graham-Cassidy bill, and work on a bipartisan fix for the ACA instead. Colorado Democratic Sen. Michael Bennet strongly opposes the legislation, while Republican Sen. Cory Gardner told the Denver Post he is “trying to get some more information” on the bill.

Whether all Coloradans will get the same opportunity to understand the bill before Congress votes next week is another question entirely.

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