Medicaid Directors Issue Strong Statement Against Graham-Cassidy Bill

In their letter, the directors said the bill would result in "the largest intergovernmental transfer of financial risk from the federal government to the states in our country’s history."

In one of the most powerful statements yet against the effort to overturn the Affordable Care Act (ACA), the board of the National Association of Medicaid Directors (NAMD) called on Congress to reject the Graham-Cassidy bill, saying the scope of work needed to create a block grant system from scratch in just 2 years “cannot be overstated.”

Medicaid directors are no strangers to innovation, the letter states, but to succeed, “these efforts must be undertaken in a thoughtful, deliberative, and responsible way.” The most recent ACA repeal attempt would not do that, they say, because it seeks to rush through a bill simply to take advantage of the budget maneuver before the September 30, 2017, deadline so Republicans only need to capture 51 votes.

The defining feature of Graham-Cassidy, unlike earlier attempts to overturn the ACA, is the way it redistributes Medicaid dollars: states that expanded Medicaid to households earning up to 138% of the poverty line would see those matching funds withdrawn and shipped to states in the Deep South and West that declined to adopt expansion. An analysis by Avalere Health and the Kaiser Family Foundation found that New York and California would lose a combined $123 billion from 2020 to 2026 while Texas would gain $35 billion.

This shift, combined with the conversion of Medicaid to a per-capita cap system, represents “the largest intergovernmental transfer of financial risk from the federal government to the states in our country’s history,” the directors say.

While the bill’s sponsors say they want to offer “flexibility,” the directors do not see this in the language, and they fear that “the vast majority of states” will fall short of meeting the plan development and contracting obligations to put a block grant program in place by January 1, 2020, the implementation date outlined in the bill.

And, as others have noted, the bill lacks a score from the Congressional Budget Office (CBO). Earlier incarnations of ACA repeals scored by CBO were all found likely to cause millions to lose coverage.

For a time, Senators Lamar Alexander, R-Tennessee, and Patty Murray, D-Washington, were holding hearings within the Senate Health, Education, Labor and Pensions committee that sought individual market stabilization measures in exchange for more expansive waivers to experiment with reforms. But those efforts were sidelined once Graham-Cassidy took flight.

“With only a few legislative days left for the entire process to conclude, there clearly is not sufficient time for policymakers, Governors, Medicaid directors, or other critical stakeholders to engage in the thoughtful deliberation necessary to ensure successful long-term reforms,” the directors concluded.