This brief provides an overview of the proposal released on September 13th by Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA)—along with Senators Dean Heller (R-NV) and Ron Johnson (R-WI) and former Senator Rick Santorum (R-PA)—to “repeal and replace” the Affordable Care Act (ACA). This is an updated version of the proposal that Senators Graham and Cassidy filed on July 27th. The Graham-Cassidy ACA repeal and replace legislation would retain many features of the Better Care Reconciliation Act (BCRA) voted down by the Senate on July 25th, including per capita caps on Medicaid spending1 and elimination of the individual and employer mandates. However, it also goes beyond that proposal by converting Marketplace and Medicaid expansion federal funding into a block grant.

OVERVIEW OF PROPOSAL -

Graham-Cassidy would eliminate federal funding for Marketplace and Medicaid expansion coverage after 2019 and replace it with a capped allotment distributed to states in the form of “Market-Based Health Care” block grants. The national amounts available for state allotments would not vary based on actual costs or enrollment, and would be less than estimated current law federal spending on Marketplace and Medicaid expansion coverage. States would have significant flexibility to use their block grant funds for coverage, payments to providers or other health care-related purposes. As explained in the appendix and as illustrated by the state-by-state estimates provided in Tables 1A, 1B and 2 of this analysis, the proposal also alters the distribution of federal funds among states, sending dollars from expansion states and other states that receive a relatively significant share of current law federal subsidies for Marketplace coverage to non-expansion states and those with lower Marketplace participation and/or costs. No state match would be required. The block grant would end after 2026.