The U.S. Senate is contemplating ACA repeal legislation that could lead to 6.7 million Californians losing coverage

September 21, 2017

The Number of Uninsured in California Could Reach 10 million by 2027

Under the latest Republican ACA “repeal and replace” bill, 6.7 million Californians could lose coverage and California could lose in one year an amount in federal funding equivalent to more than one-third of all General Fund spending in California’s budget, $57.5 billion, according to the U.C. Berkeley Labor Center (Labor Center) blog post.

Introduced by Senators Bill Cassidy and Lindsey Graham, with co-authors Heller and Johnson, as an amendment to the House-passed H.R. 1628, the Graham-Cassidy legislation is so far the worst of all the repeal and replace bills for California. See ITUP’s summary of the bill here. The impact for California is so devastating because the bill:

  • Replaces enhanced federal funding for the Medicaid adult expansion, ACA tax credits and cost-sharing reduction subsidies with “market-based,” lump-sum state grants, providing states with less funding than current law and total elimination of the additional federal funds starting in 2027. After 2026, Graham-Cassidy essentially repeals the ACA with no replacement.
  • California is hit especially hard by the new market-based grant program because the allocation formula redistributes funds from states that expanded Medicaid under the ACA to states that did not. California is among 20 states facing cuts in the range of 35-60 percent below the funding they receive under current law. (See Center on Budget and Policy Priorities overview.)
  • Includes the same dramatic shift in the federal responsibility for Medicaid as in House-passed and Senate proposed prior ACA repeal proposals. The new per capita cap for Medicaid implements formula-based, fixed funding for states, and significantly reduces federal funding to states over time, which will require drastic program cuts in the core Medi-Cal program or major new state revenues. In addition, by including funds for the ACA Medicaid expansion in the new block grant, with less federal funding, it will be difficult for California to maintain the Medi-Cal benefit and coverage expansions implemented under ACA.
  • Destablizes the individual health insurance market by eliminating federal ACA subsidies to help individuals purchase coverage and the penalties for individuals and employers not complying with ACA coverage mandates.
  • As part of the new market-based block grants consolidating ACA funding streams, requires CMS to approve state waiver requests of key consumer protections in the ACA, such as the requirement for insurers to cover essential health benefits, the prohibition on charging individuals more based on health status or pre-existing condition.

Graham-Cassidy Penalizes States Successful Under ACA

Although the Graham-Cassidy legislation has many familiar elements from the federal debate on repealing and rolling back the ACA this year, Cassidy-Graham goes further than most prior proposals and ends with full repeal of all ACA funding for expanded coverage after 2026. Moreover, the proposed allocation formula for the new market-based grant program (ACA block grant) appears to be cynically designed to fiscally penalize states like California that stepped up to expand coverage under the ACA, while rewarding states that refused to move forward in implementing the ACA.

The Senate must pass and return H.R.1628 to the House of Representatives by September 30 when authorization to pass a budget reconciliation bill with just 51 votes runs out. As of this writing, Graham-Cassidy is slated to have at least one hearing next week (potentially September 26 or 27) and could come up for a vote thereafter.

Given the magnitude of the cuts California could sustain, and the potential dramatic impact on the number of uninsured in the state, you may want to let your Congressional representatives know about these devastating consequences if they vote for H.R. 1628.

You can find contact information for your members of Congress here.