CBO: Graham-Cassidy bill would result in 'millions' fewer people with health insurance

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Federal spending on Medicaid would be reduced by about $1 trillion from 2017-2026 under the Graham-Cassidy bill, according to the CBO.

The latest GOP proposal to repeal and replace Affordable Care Act would reduce the on-budget deficit by at least $133 billion and by 2026 cause “millions” fewer people to be covered with comprehensive health insurance that covers high-cost medical events, according to the Congressional Budget Office.

The CBO released its preliminary analysis (PDF) of the Graham-Cassidy bill on Monday evening, even as senators continued to question witnesses about the measure during an hours-long Finance Committee hearing. In fact, once the analysis became public, those opposed to the legislation wove its findings into their arguments. 

For example, Teresa Miller, Pennsylvania’s acting secretary of health and human services, noted that the CBO estimated Medicaid expansion states would see 30% less funding as of 2026 relative to the agency’s baseline projections. (Nonexpansion states, meanwhile, would see 30% more funding, per the CBO).

“I do think we’re looking at huge transfers of funding from expansions states to nonexpansion states,” she said. 

Yet one of the bill’s authors, Louisiana Sen. Bill Cassidy, pointed out that the CBO expressed some optimism about how states might handle the flexibility they’d get with with block grants. Indeed, the agency estimated that “states would learn from one another, and over time, they would adopt practices found to be successful elsewhere.”

Here are some additional highlights from the preliminary analysis:

  • Federal spending on Medicaid would be reduced by about $1 trillion from 2017-2026, and the program would cover millions fewer enrollees.
  • The CBO predicted that the transition to block grants for states would result in “market disruptions and other implementation problems,” even though the bill allocates funding to assist that transition.
  • The $1.2 trillion that would be appropriated for the new block grants from 2020 to 2026 is about $230 billion less than what the CBO had predicted would be spent on subsidies for the Medicaid expansion population and marketplace enrollees under the ACA.
  • Adding credence to concerns about the bill’s effect on individuals with pre-existing conditions, the agency said it anticipates that “some states would allow insurers to set premiums on the basis of an individual’s health status.”
  • In these states, more young and healthy individuals would likely purchase health insurance, but for some people—likely the less healthy—“premiums would be a very large share of their income.”