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Cassidy-Graham Would End Medicaid Expansion in 2020, Leave Millions of Low-Income Adults Uninsured

Update, September 25: We’ve updated this post.

The latest version of the plan from Senators Bill Cassidy and Lindsey Graham to repeal the Affordable Care Act (ACA) would still end Medicaid expansion in 2020 and make even deeper cuts to Medicaid than prior Republican repeal legislation, such as the Better Care Reconciliation Act (BCRA). Like the BCRA, the latest Cassidy-Graham bill would cap and cut federal funds for all of Medicaid, leading to large and growing cuts in benefits, eligibility, and provider rates.  But unlike the BCRA, which would have let states keep their ACA Medicaid expansions but with much less federal funding, Cassidy-Graham would end the ACA’s Medicaid expansion altogether, ending expansion coverage for more than 11 million newly enrolled low-income adults.  Senator Rob Portman reportedly portrayed the bill as letting states keep their Medicaid expansions if they choose, but that’s not the case.

Beginning in 2020, Cassidy-Graham would preclude states from extending Medicaid to adults with incomes below 138 percent of the poverty line — a group that’s now eligible for coverage in states that expanded Medicaid under the ACA. This change actually goes further than BCRA, which the Senate rejected in late July, because it eliminates the state Medicaid expansion. While the BCRA would have effectively ended the expansion over time by phasing out its enhanced funding (at least a 90 percent matching rate on a permanent basis), it would have let states continue their expansions at their regular federal matching rate for Medicaid, on average 57 percent.

Under Cassidy-Graham, expansion states would have to decide whether and how to use the bill’s block grant funding to cover adults who would lose Medicaid eligibility, along with people receiving subsidies in the marketplace.  The latest version of the bill may have changed its formula to calculate the block grant, but it still provides inadequate funding to states. The only way states could continue covering these adults under Medicaid would be to return to an “old way” of expanding coverage through Medicaid waivers, but Cassidy-Graham would bar states from using the large majority of block grant funds for Medicaid.

So a state would either have to find offsetting savings to ensure the waiver doesn’t cost the federal government more than it would have spent absent the waiver, or it would have to significantly restrict enrollment by capping it or lowering eligibility levels relative to current law.  And the block grant would disappear entirely in 2027, just as expansion states face increasingly severe cuts to federal funding for the underlying Medicaid program through the bill’s per-capita cap.

Even with the most recent version’s changes, Cassidy-Graham would still severely jeopardize coverage for over 11 million low-income adults. And for those lucky enough to retain coverage, it would likely prove inadequate to treat serious health conditions, such as opioid addiction and mental illness.