Cassidy-Graham: the Obamacare repeal plan McCain is supporting, explained

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The senator who cast the final vote to kill Obamacare repeal is unexpectedly helping to revive that effort from the dead.

Sen. John McCain told the Hill Wednesday that he would support a plan offered by Sens. Lindsey Graham (R-SC) and Bill Cassidy (R-LA) to repeal the Affordable Care Act. And McCain later released a statement clarifying that he supports the bill in concept, but hasn’t seen a final product.

“While I support the concept of the Graham-Cassidy proposal, I want to see the final legislation and understand its impact on the state of Arizona before taking a position,” McCain said in that statement.

The Senate rejected four different Obamacare repeal plans in late July. Cassidy-Graham emerged in the midst of that chaotic process. It’s the last health plan left standing — and also the most extreme.

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The senators who back the bill have spent the past two months selling it as a compromise plan and say it is a way to return power to states, giving local governments more control over how they spend federal dollars.

“We need to let states take care of themselves and give power back to patients,” Cassidy wrote in a mid-July op-ed for the Washington Post. “Let a blue state do a blue thing and a red state such as mine take a different, conservative approach.”

But the most detailed version of the plan we’ve seen so far does much more than that. The proposal would eliminate the health care law’s subsidies for private insurance and end the Medicaid expansion. The health insurance marketplaces would no longer exist as they are envisioned to continue under other Republican proposals.

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Cassidy-Graham would repeal the health care law’s tax credits for middle-income Americans, the cost-sharing reduction subsides for low-income Americans, and the Medicaid expansion in 2020. This makes it a bit more radical than other Republican plans, which leave a (less generous) version of the tax credits in place.

It replaces all those programs with a market-based health care grant program, which would send states a lump sum of money to put toward health care–related purposes.

Under Obamacare, this money has to be spent on providing health insurance. Under Cassidy-Graham, it can be spent on other things. The options include:

1. Funding high-risk pools

2. Sending payments to insurers to “stabilize premiums and promote State health insurance market participation”

3. Make payments directly to health care providers, like doctors and hospitals

4. Funding programs to reduce “out-of-pocket costs, such as copayments, coinsurance, and deductibles, of individuals enrolled in plans offered in the individual market”

5. "To establish or maintain a program or mechanism to help individuals purchase health benefits coverage”

6. Provide “wrap-around” coverage for those already enrolled in a state medical assistance program

Notably absent from any of these options is a requirement to focus funds on low-income populations. This would be a big shift from the Affordable Care Act, which targeted its spending on the lowest-income populations by expanding Medicaid and providing the biggest tax credits on the private marketplace to those who earn the least.

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