How Will the Graham-Cassidy Proposal Affect the Number of People with Health Insurance Coverage?

• Published in: Policy File 2017
• Main Authors: Fiedler, Matthew, Adler, Loren
• Format: Report
• Language: English
• Subjects: Government; Health care policy; The Brookings Institution

On September 13, Senators Graham and Cassidy, together with two other Republican colleagues, introduced legislation that would repeal major portions of the Affordable Care Act (ACA). Press reports indicate that the legislation has gained considerable support among Senate Republicans, and Senate Majority Leader McConnell's office announced on Wednesday that the Senate would hold a vote on this legislation sometime during the week of September 25. This legislation has not yet been analyzed by the Congressional Budget Office (CBO), and CBO has indicated that it will not be able to provide a complete analysis of the legislation before the Senate vote. Notably, CBO stated that its analysis would not include "point estimates of the Graham-Cassidy legislation's effects on the deficit, health insurance coverage, or premiums." To help fill the gap left by the Senate's decision to hold a vote in the absence of a complete CBO analysis, this analysis draws upon CBO's estimates for prior legislation to evaluate how the Graham-Cassidy legislation might affect the number of people with health insurance coverage. For years prior to 2020, this new legislation broadly tracks prior Republican bills, most importantly by immediately repealing the individual mandate. CBO's analyses of these prior bills imply that the Graham-Cassidy legislation would reduce insurance coverage by around 15 million in 2018 and 2019. The reduction would be larger if uncertainty about the effects of the more radical changes implemented by the legislation in 2020 caused some insurers to pre-emptively withdraw from the individual market.Starting in 2020, the Graham-Cassidy proposal would eliminate the ACA's Medicaid expansion and Marketplace subsidies. Also in that year, the legislation would begin providing block grant funding to states, as well as allowing states to seek waivers from ACA regulations that bar insurers from varying premiums based on health status and require insurers to cover certain health care services. To estimate the effects on insurance coverage during these years, we consider the various ways in which states might respond to the options provided by the legislation, using prior CBO analyses to evaluate the likely coverage outcomes for each of four broad categories of states. We then make assumptions about how many states will take each broad policy approach. Based on this analysis, we estimate that the Graham-Cassidy legislation would reduce the number of people with insurance co