Senate Republicans unveil health care reform bill that gives states more power

U.S. Sen. Bill Cassidy (R-LA) introduced legislation on Wednesday to repeal the Affordable Care Act and replace it with annual block grants to states, giving them greater flexibility with how they spend health care dollars.

Cassidy was joined by U.S. Sens. Lindsey Graham (R-SC), Dean Heller (R-NV), Ron Johnson (R-WI) and former U.S. Sen. Rick Santorum (R-PA) in unveiling the legislation known as the Graham-Cassidy-Heller-Johnson (GCHJ) proposal.

The lawmakers said returning power to the states through federal funding of an equitable block grant system was essential, and would allow states to support programs that work or implement new options to expand coverage and lower premiums.

“This past week, we heard testimony from Democrat and Republican governors and Medicaid directors who believe that, with increased flexibility and freedom from Washington, DC regulations, they can do a better job of providing coverage for the people of their state. We agree,” Cassidy said. “This amendment gives that flexibility to states while protecting patients and the federal taxpayer.”

The bill would strengthen the ability of states to waive Obamacare regulations, and would repeal the individual and employer mandates. The new plan would also protect patients with pre-existing medical conditions.

“It takes us off the path to single payer health care – which would be a disaster – and puts us on a path toward local control,” Graham said.

The legislation would resolve inequity in the current system where a handful of states receive more than a third of Obamacare funds. All states would have “funding parity” by 2026 under the GCHJ proposal.

“Returning more health care decisions to the states and ensuring equal treatment for states like Wisconsin that spend taxpayer dollars wisely will allow local leaders to tailor their health care system to the needs of its citizens while maintaining protections for those with high cost and pre-existing conditions,” Johnson said.

The block grants would replace the federal money currently being spent on Medicaid expansion, tax credits, cost-sharing reduction subsidies and basic health plan dollars.

Examples of what states could choose to do with the grant money include helping individuals purchase health benefit coverage through premium support, helping with out-of-pocket costs, or entering into arrangements with insurers to encourage market participation.

Heller noted that until recently, Nevada residents living in 14 out of 17 counties would not be able to buy insurance on the exchange next year. Furthermore, low-income residents are forced to pay a penalty for not purchasing health care they cannot afford under the current system.

“Doing nothing to try to solve Obamacare’s failures isn’t an option,” Heller said.