The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Two Significant Healthcare Bills Introduced to Replace Obamacare

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


On Wednesday, two important healthcare bills were introduced in the Senate to replace the Patient Protection and Affordable Care Act (ACA), or Obamacare.  One bill, introduced by Sens. Bill Cassidy (R-La.), Lindsey Graham (R-S.C.), Dean Heller (R-Nev.), and Ron Johnson (R-Wisc.), would amend the healthcare reform legislation that passed the House in May, the American Health Care Act.  That bill was sent to the Senate and has languished in that chamber since the end of July, in spite of several attempts to address senators' concerns by amending it.

The other bill was introduced by Sen. Bernie Sanders (I-Vt.).  The legislation would have all our healthcare provided under a single-payer or government-run system.

The Cassidy/Graham/Heller/Johnson bill essentially block grants all the money currently spent on ACA to the states and would return healthcare regulation back to the states.  This moves power out of Washington and closer to the patient.  If a state’s governor and state legislature believe Obamacare’s mandatory benefits and regulations are wonderful, they can keep them.  If a state’s political leadership believe they can come up with better ideas to regulate and lower the cost of healthcare in their state than Obamacare, they can implement them.

While the bill zeroes out the fines for individuals and employers that choose not to purchase health insurance, it would require states to maintain “access to adequate and affordable coverage for individuals with pre-existing conditions.”  The bill also provides an annual amount that will be appropriated to the states and ends Medicaid expansion in 2019.  The block grant funding starts at $136 billion in 2020, with gradual increases. It also levels out the federal money that is being utilized among the states.  Under Obamacare, California, Massachusetts, Maryland, and New York receive almost 40 percent of all the money spent under Obamacare.  The Cassidy/Graham bill would eventually equalize the federal funding for all states based on a per capita rate.

Sen. Graham stated by returning funds and power to the states, it will allow the states to innovate and improve healthcare.  He argued that if a new methodology works well in one state, it would be adopted by other states.

You can read the bill’s section by section description here and a FAQ document here.  If you are interested in watching the announcement of the plan, click here.  While the senators are still waiting for a Congressional Office Budget score, Sen. Graham says the cost is $1.2 trillion over seven years.

A few hours after the Cassidy/Graham bill was released, Sen. Bernie Sanders introduced his Medicare for All Act.  It would be a single-payer, or government-run system, similar to those used in most countries.  Healthcare would be considered a basic right given by the government and power would remain in Washington.

Currently, 16 Democratic senators support his bill.  While the legislation has not been scored by the CBO, it has been estimated to cost $1.38 trillion a year.  It will be paid for by a taxing businesses, households, capital gains and dividends at the same rate as income, and by placing additional taxes on those with incomes of more than $250,000 a year and estates.  Sanders also claims additional funding will be provided with the "savings" gained by eliminating the private healthcare sector.  You can watch the announcement of the plan here.

But, here’s the problem with the Medicare for All plan.  The current Medicare program has been declared financially unsustainable by the CBO and the Medicare Trustees.  Its cost was $692 billion in 2016 and expanding it will only cause its financial structure to be further compromised.

Other states, such as California, Colorado, and New York have recently tried to implement single-payer systems but have so far been unsuccessful because of the enormous costs.  Even Sen. Sander’s state of Vermont rejected a single-payer plan in 2014 because of the prohibitive expense and the negative effects it would have on the state's economy.

Single-payer advocates in the U.S. do not like to talk about why government-run healthcare systems in other countries are less expensive than ours: these countries utilize price controls and rationing to keep costs down.  Waiting times in Canada to get access to care, for example, are notoriously long and England’s National Institute for Health and Care Excellence, ironically called NICE, is infamous for rationing.  A single-payer system would be hugely destructive to our nation’s lead in medical technology due to price controls that would inevitably be instituted, just as they have been implemented in other countries.

However, as long as Republicans control Congress, there is little chance Sen. Sander's plan would pass.  However, it could be a major campaign issue for 2018 and 2020.

Sen. Graham stated in today’s press conference that considering everything else the Republicans have attempted to pass has failed and there is little time left to get something done in this legislative year, the only thing left for Republicans to do is to pass the Cassidy/Graham bill and send the money and power back to the states.  Otherwise our nation will be stuck with either propping up Obamacare or accepting the fact that government-run healthcare will eventually be the law of the land.

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