State Medicaid Adviser Says Graham-Cassidy Bill Will Stabilize Marketplace

Sen. Graham says bill will give states flexibility and accountability

Sen. Lindsey Graham / Getty Images
September 26, 2017

A state Medicaid adviser told lawmakers on Monday that the Graham-Cassidy bill to replace Obamacare would stabilize the health care marketplace by combining Medicaid populations with younger, healthier individuals.

Dennis Smith, senior adviser for Medicaid and health care reform for the Arkansas Department of Human Services, said at the Senate Finance Committee hearing today that the Congressional Budget Office has predicted in 2017 there would be 35 million nonelderly individuals enrolled in Medicaid and the Children's Health Insurance Program (CHIP). Because of the Affordable Care Act, Smith explained, there would be 15 million more added to that number. Now, however, there are 69 million nonelderly individuals on Medicaid and CHIP.

"So the individuals that CBO predicted would be receiving subsidies over in the marketplace in fact are in Medicaid instead," Smith said. "As Congress searches for answers for how to stabilize premiums for those in the individual market, it should consider where people actually went for coverage."

Smith says the Graham-Cassidy bill will stabilize the market because it puts both populations together and includes a pool with 22 million individuals who are relatively young and healthy.

"Everyone keeps talking about 'how do we stabilize the premiums for this population,'" Smith said. "Well the solution is put more people into it—that's what will truly stabilize the pool."

"Combining funding for these two groups into state block grants is consistent with the basic concepts of insurance pools," he said. "Adding younger, healthier lives and spreading the risk among a larger pool of people will help stabilize premiums for everyone in the individual market, both those who are subsidized and those who are not."

Smith says that creating a program to cover these 22 million individuals under Graham-Cassidy will be a challenge, but it's not unrealistic.

"States are already serving more than half of these individuals through Medicaid; and there are 50 million more people under age 65 covered through traditional Medicaid," he said.

Sen. Lindsey Graham (R., S.C.) says the block grants to states will give them more control with more flexibility and accountability.

"We're going to send this money back to the states, you can't spend it on roads and bridges, you have to spend it on health care," Graham said. "You're going to have flexibility but you're also going to have accountability and for the first time in health care somebody is going to listen to you because if you don't like the health care you've got you can complain to, somebody you vote for."

Graham says that by keeping the taxes in places, states can choose to do whatever they want with the money. They can repeal Obamacare's mandates or they can implement a single-payer health care system.

"Here's the idea of Graham-Cassidy-Heller-Johnson—repeal the individual mandate and employer mandate but you can reimpose it in your state if you like," Graham said. "If you want to go to single-payer health care you can do it in Oregon but you aren't going to drag me with you."

"My goal is to get the money and power out of Washington closer to where people live so they'll have a voice about the most important thing in their life," he said.