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Cassidy makes the case for his plan to repeal Obamacare

Early Friday morning, over coffee and donuts, Sen. Bill Cassidy (R-LA) gathered a dozen or so health policy reporters in his Senate office to make the case for his health care bill, the Graham-Cassidy-Heller-Johnson Amendment.

Cassidy was brimming with optimism about its future, either this session or the next one, as he expects Republicans to continue to work on his bill. He feels it is only a few votes away from enough support to pass the Senate. (This, however, is also the case for many Obamacare repeal bills that fail to pass too.)

He described yesterday, when momentum began to build behind his plan, as his "best day in the Senate ever."

Cassidy's case for his bill is that it levels the playing field in American health care spending, evening out the amount different states receive for their Medicaid and individual-market subsidies.

His bill — which I describe in greater detail here — would combine all the money the Affordable Care Act currently spends providing coverage to low-income and middle-income Americans, put it into one big pot, and distribute it in a way that Cassidy argues is more equitable.

"Those funds are quite unequally distributed," says Cassidy. "Where you live should not determine how healthy you are."

The biggest reason some states are getting way less Obamacare money than others is that they don't participate in the Medicaid expansion. There are 19 states, largely run by Republican governors, that have not taken up the health law's option to expand coverage to residents who earn less than 138 percent of the federal poverty line (about $14,000 for an individual).

A reporter pushed Cassidy on this question: Wouldn't the easier solution be encouraging all states to expand Medicaid, if the goal is to level the playing field? He thinks that is an unreasonable expectation, that these states have been quite clear they don't want to participate. Governors, he argues, are turned off by the fact that they have to kick in 10 percent of the cost of Medicaid expansion and feel they don't have room for that spending in their budget.

"Governors haven't done it," Cassidy says. "We want those lower-income Floridians [who live in a state that hasn't expanded Medicaid] and that was the goal to begin with."

At moments, Cassidy was quite clear: This plan is not great for your state if you expanded Medicaid. While he argues there are elements that attempt to stabilize their Medicaid program, his bill is ultimately a transfer from the states that expanded Medicaid to those that didn't.

"We recognize there are circumstances where states that expanded Medicaid will have to really ratchet down their coverage," Cassidy.

This wasn't always the type of plan that Cassidy supported. Earlier this year, he partnered with Sen. Susan Collins (R-ME) to draft a health care bill that let states keep the money they currently receive under the Affordable Care Act but use it in different ways.

California, for example, could keep running the Affordable Care Act because California thinks the law works well. Other states could use the money to try something different.

But under this new proposal, California can't keep running the Affordable Care Act as it does now. The Center on Budget and Policy Priorities estimates that California would see its federal funding decline $27 billion over the next decade under Cassidy's bill. (His office argues that's an overestimate of the loss, but concedes that Medicaid expansion states can face some level of cuts.)

This seems like it might make it a tough sell for Republicans who represent Medicaid expansion states. But so far, that hasn't been the obstacle I expected: Sen. Dean Heller (R-NV) represents a Medicaid expansion state, as does Cassidy himself. (He opened the briefing by praising the state for signing up nearly a half-million low-income Louisianans into Medicaid expansion.)

Cassidy's bill solves a problem that exists because of Republican governors' and legislatures' refusal to participate in the Medicaid expansion program. And it does so at the cost of states that have signed up for that program, run it for five years, and now see Medicaid expansion facing huge risk.

Chart of the Day

The Urban Institute

America's uninsured largely live in states that didn't expand Medicaid — and face financial hurdles affording coverage. The Urban Institute published its latest look at the Americans who remain without coverage. They find that this group tends to be younger, low-income, and live in states that did not expand Medicaid. Read the study here.

Kliff’s Notes

With research help from Caitlin Davis

Today's top news

  • "Paul Ryan 'appreciates' Graham-Cassidy Obamacare bill": “Ryan tweeted support for the plan by four Republican senators that would give states Obamacare funding in the form of block grants. The senators have described the bill as the last chance before a Sept. 30 deadline to get legislation repealing Obamacare through the Senate with only 51 votes.” —Robert King, Washington Examiner
  • "Analysts see Trump threats to insurers boosting premiums": “Average premiums for individually purchased health insurance will grow around 15 percent next year, largely because of marketplace nervousness over whether President Donald Trump will block federal subsidies to insurers, Congress' nonpartisan fiscal analyst projected Thursday.” —Alan Fram, Associated Press
  • "New Mexico's ACA co-op in dire straits": “New Mexico Health Connections, a not-for-profit insurance co-op funded through the Affordable Care Act, is a month overdue in filing its second-quarter financial paperwork. And the co-op's most recent documents, as well as federal ACA documents, show potentially large financial problems that could force New Mexico to shut the company down.” —Bob Herman, Axios

Analysis and longer reads

  • “How health-care reform affected America, in 51 graphs”: “Last year, 8.6 percent of Americans lacked health insurance. Three years earlier, that figure was 14.5 percent, meaning that the rate dropped by 5.9 percentage points over the period that the Affordable Care Act went into effect, a 40 percent decline from the 2013 figure.” —Philip Bump, Washington Post
  • “POLITICO-Harvard poll: Obamacare repeal still tops GOP voters' to-do lists”: “Republican leaders want to move past Obamacare repeal, but most GOP voters aren't ready to let them do it. According to the latest POLITICO-Harvard T.H. Chan School of Public Health poll, a key finding shows the Trump administration's messaging on health care is clearly resonating with the party's base.” —Dan Diamond, Politico
  • “Yes, patients want to discuss pricing, payment options before treatment”: “More than three-quarters of healthcare consumers say it's important or very important that they know their costs before treatment, and 53 percent want to discuss financing options before care. But the vast majority of healthcare providers are not satisfying these demands, according to the HealthFirst Financial Patient Survey.” —Jeff Lagasse, Healthcare Finance