Even without independent analysis from the Congressional Budget Office, one of the effects of the current plan to overhaul Obamacare is clear. The bill — known as Cassidy-Graham after Sens. Bill Cassidy (R-La.) and Lindsey O. Graham (R-S.C.), who sponsored it — will cut government spending on health care. It has to: If it doesn’t reduce the federal budget, it isn’t eligible for the reconciliation rules in the Senate that would let it pass without facing a filibuster. That means that coverage will be reduced.
There’s been a lot of attention paid to the fact that it’s mostly blue states that will see the sharpest cuts in funding over the short term. That’s not a random occurrence, as our Dave Weigel reported Wednesday. Because many red states chose not to expand Medicaid under Obamacare, the new bill’s overhaul of how Medicaid spending is allocated would disproportionately affect blue ones.
Graham was explicit in pitching this idea to the Republican base in an interview with Breitbart. “No longer will four blue states get 40 percent of the money. A state like Mississippi, they get a 900 percent increase. South Carolina gets 300 percent,” he said.
At least over the short term.
Analysis released Wednesday by the health-care consulting firm Avalere estimates that the $215 billion in federal spending that the bill would eliminate by 2026 will balloon to nearly $500 billion the year after and $4.2 trillion by 2036. That’s because, as critics of the bill have pointed out, funding for the system ends in 2026, meaning it would need to be reappropriated by the government. If that doesn’t happen, funding will fall further.
At the same time, the bill would shift how Medicaid works, dramatically reducing the amount spent per person relative to how the system works under the current law. By 2036, that change would mean a reduction in federal spending in every single state relative to the current law.
Avalere’s analysis suggests that, overall, only 16 states would see any increase in federal spending at all, 15 of them states that voted for President Trump in 2016. (The exception is Virginia.) Even Cassidy’s home state of Louisiana would see consistent declines, which is one reason that the state’s health secretary publicly opposed the legislation.
That chart shows the reduction in spending, but that’s a second-tier concern. Avalere also gamed out how the reductions in Medicaid spending that are driving federal spending down over the long term would affect Americans.
Spending on the elderly would increase. Spending on the disabled, children and other adults would decline relative to the current law. By 2036, Avalere estimates, Medicaid spending that supports children will be cut by nearly a third.
Again, these estimates are from one firm. Usually, the nonpartisan Congressional Budget Office would weigh in with its own analysis. But because Cassidy, Graham and the rest of the Republican caucus in the Senate need to act by Sept. 30 to use the reconciliation rules that allow them to pass legislation with only 50 votes (plus a tiebreaker from Vice President Pence), they’re not waiting for those numbers to be completed, in a sharp break from past practice.
That this lack of analysis makes it harder for its opponents to point out the negative long-term effects is probably something more than a happy coincidence.
