Cassidy, Graham unveil plan to replace ACA with state block grants

Four Republican senators unveiled a radical proposal Wednesday to repeal and replace the Affordable Care Act by handing states $1.2 trillion in ACA subsidies and letting them design their own coverage systems with few limitations on what they could do.

Under the bill presented by Sens. Lindsay Graham (R-S.C.), Bill Cassidy (R-La.), Dean Heller (R-Nev.), and Ron Johnson (R-Wisc.), each state would receive a federal block grant starting in 2020 to replace the ACA’s premium subsidies, cost-sharing reduction payments and Medicaid expansion funding.

States could use the money to offer consumers premium support, pay insurers and providers to offer coverage and care, help people with out-of-pocket costs, or establish reinsurance programs or high-risk pools to cover people with pre-existing medical conditions.

Federal funding to states to expand Medicaid to low-income adults would end in 2020. In addition, federal Medicaid payments to the states for the traditional Medicaid program would be capped, similar to previous Senate and House GOP bills to repeal Obamacare.

The bill’s block grant funding to the states to cover their populations would end up 2026, with no provisions for extending it.

Senate Republicans have until Sept. 30 to pass the bill through the expedited budget reconciliation process that requires just 51 votes for passage. The sponsors urged President Donald Trump and Senate Majority Leader Mitch McConnell (R-Ky.) to press all GOP senators to back their bill.

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