Caitlin Owens
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Some Republicans want to merge tax reform, health care

Sen. Lindsey Graham isn't ready to give up on health care. Photo: Andrew Harnik/AP

Graham-Cassidy is almost certainly dead, but some Republicans want to press on with health care — along with tax reform — through the 2018 budget, and momentum for the idea seems to be building. That way, Sept. 30 wouldn’t be their final deadline after all. "There's a pretty vocal do both tax reform and healthcare with FY18 reconciliation camp," one senior GOP Senate aide told me.

Why this matters: Some Senate Republicans don't want to give up on health care, but others worry combining the two difficult topics will sink the tax reform effort. "We don't have the political capital," said the aide, who is in the latter camp. But as we've seen over the last 10 days, it becomes politically difficult for the GOP to ignore a glimmer of hope when it comes to repealing the Affordable Care Act.

Who’s on board: Sens. Ron Johnson, Lindsey Graham and Rand Paul — so far.

Be smart: Writing budget resolutions and reconciliation instructions is complicated, but here's all you need to know: It would be possible to do both tax reform and health care through the same budget vehicle. So the argument isn't about whether this is possible — it's about whether the GOP should do it.

Johnson and Graham might be able to force the party's hand. "If we're not able to pass this this week, both Lindsey Graham and I have said — we're both on the Budget Committee — we'll insist on a budget resolution that'll give us the tools of reconciliation for health care and for tax reform," Johnson told reporters Monday.

  • Paul told reporters on Monday that "there's no reason you couldn't do health care and taxes at the same time."
  • Like health care, passing a budget — and then tax reform later — will only require 50 votes. However, that means Republicans can only lose two votes on a partisan bill to still pass it, with Vice President Mike Pence's tie-breaking vote.
  • "This will be the next problem [because] they won't have 51 votes for the budget," a GOP lobbyist said, adding that as far as tax reform goes, "I think this whole thing is going to get derailed by health care."
Yes, but: There are a lot of Republicans who are sick of dealing with health care. And very importantly, House GOP tax leaders have been clear that they do not want to mix health care with tax reform.
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Collins will oppose Senate health care bill

Sen. Susan Collins said she opposes the Senate's health care plan. (AP Photo/Robert F. Bukaty, File)

Sen. Susan Collins officially said she will oppose the Senate's latest bill to repeal parts of the Affordable Care Act — yet another nail in the coffin for a bill that's moving further away from the 50 votes it would need to pass.

Why it matters: It would only take three "no" votes to kill the bill. And Collins' opposition makes it a total of four Republicans who say they won't vote for the bill — two moderates (Collins and Sen. John McCain) and two conservatives (Sens. Rand Paul and Ted Cruz).

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Cassidy-Graham hearing: A dramatic political showdown over a dying bill

Capitol police remove protestors from the Finance hearing on Cassidy-Graham. Photo: Caitlin Owens/Axios

The Senate Finance Committee hearing on Republicans' latest health care bill is about as chaotic as congressional hearings get, with senators talking over one another, testifying about bills they wrote (which is unusual), and protestors in wheelchairs being dragged out of the committee room.

Be smart: This dramatic political showdown is all happening for a bill that's widely assumed to be dead. Not only are Republicans highly unlikely to pass this bill, but now they'll also have to deal with photos of disabled people in wheelchairs being removed from a hearing about a bill they fear could take away their health care coverage.

What's happened:

  • Protestors attending today's hearing on Republicans' health care proposals were immediately removed by Capitol police after they began chanting, "No cuts to Medicaid, save our liberty" as soon as Chairman Orrin Hatch gaveled the hearing into session. The hearing couldn't begin for roughly 20 minutes — until the protestors, many in wheelchairs, had been removed. "If you can't be in order, then get the heck out of here," Hatch said once the protestors were removed.
  • Sen. Bill Cassidy, one of the bill's sponsors and one of the witnesses testifying at the hearing, said the most recent version of the bill is also the final one, aside from corrections to drafting errors.
    • Ranking Member Ron Wyden asked if the most recent version of the bill is the one the Senate will vote on. "Yeah, I believe so…I hope a correction of a drafting error doesn't constitute a whole 'nother version," Cassidy replied.
    • Why this matters: Sens. Rand Paul and Ted Cruz are withholding their votes for the bill unless they get policy changes they've asked for. Cassidy made it sound like those changes aren't coming. Sen. John McCain is the third public "no" vote, meaning the bill is looking pretty dead.
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Cruz still a "no" on Graham-Cassidy

Sen. Ted Cruz currently wouldn't vote for the Graham-Cassidy bill. Photo: Jose Luis Magana / AP

Sen. Ted Cruz still is not a "yes" vote on the Graham-Cassidy health care bill, according to a Cruz aide, despite changes made in a new version of the legislation released publicly Monday morning. These changes include more conservative regulatory provisions. It's not clear why Cruz doesn't support the bill at this time.

Why this matters: Cruz is the third Republican senator to say he opposes the bill. It only takes three to kill it.

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Here's the new Graham-Cassidy bill

Sens. Cassidy (on left) and Graham are set to introduce a new version of their health care bill. Photo: Pablo Martinez Monsivais / AP

Sens. Lindsey Graham and Bill Cassidy have revised their health-care bill, allowing states to loosen more of the Affordable Care Act's regulations while diverting more money to the states whose senators hold the deciding votes on the legislation. They will formally release the revised measure tomorrow.

Why it matters: The deadline to pass a bill with just 50 votes is Saturday.

The Congressional Budget Office is expected to release preliminary estimates this week of the initial — and now outdated — version of the bill. With the clock ticking and little time for independent economic analyses, Graham and Cassidy are making a last-minute play for senators who have been critical not only of the bill's contents, but of the rushed process, too.

What's different: According to Graham and Cassidy's analysis, the revised bill would direct more money to Alaska, Arizona, Kentucky and Maine, compared with earlier versions. But it would still reduce overall federal funding to those states — whose Republican senators are, for now, opposed to the bill or undecided.

  • Although the state-by-state numbers being circulated show these states faring well, the Kaiser Family Foundation's Larry Levitt called them "pretty misleading," as they don't take into account the per-person cap on federal Medicaid funding. They also add state savings to the block grants under the bill, but don't include them in the current law baseline, meaning the comparison isn't apples to apples.

The revisions also ramped up some of the regulatory rollbacks needed to help win conservative votes. Sen. Ted Cruz said earlier today that he's not yet on board with the legislation.

For Alaska:

  • Funding carve outs for low-density states
  • Increased Medicaid federal match rate for high-poverty states, aka Alaska and Hawaii

Regulatory changes:

  • Allows "multiple risk pools," which could separate sick and healthy people and thus drive up premiums for people with pre-existing conditions.
  • Allows states to change the federal cap on out-of-pocket costs for enrollees.
  • Allows states to decide how much insurers can charge people with pre-existing conditions, the benefits plans must offer and how cost-sharing is structured.
  • States only have to describe their plans; they don't have to submit waivers of insurance rules.
  • "If there was any question about Graham-Cassidy's removal of federal protections for pre-existing conditions, this new draft is quite clear," Levitt tweeted.

Go deeper: The bill ... State-by-state effects

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McCain a no on health care bill, likely killing it

Sen. John McCain said Friday he won't vote for the health care bill. Photo: Jacquelyn Martin/AP

Sen. John McCain announced today he won't vote for the Cassidy-Graham health care bill, saying once again he wants the Senate to adhere to regular order and do things in a bipartisan fashion. With Sen. Rand Paul a firm no and Sen. Susan Collins almost assuredly a no, this likely kills the Senate's last attempt to repeal and replace the Affordable Care Act before its Sept. 30 deadline.

Key quote: "We should not be content to pass health care legislation on a party line basis ... I cannot in good conscience vote for the Graham-Cassidy proposal."

Lindsey Graham’s response: "My friendship with John McCain is not based on how he votes but respect for how he's lived his life and the person he is. I respectfully disagree with his position ... We press on."

McCain's full statement:

"As I have repeatedly stressed, health care reform legislation ought to be the product of regular order in the Senate. Committees of jurisdiction should mark up legislation with input from all committee members, and send their bill to the floor for debate and amendment. That is the only way we might achieve bipartisan consensus on lasting reform, without which a policy that affects one-fifth of our economy and every single American family will be subject to reversal with every change of administration and congressional majority.

"I would consider supporting legislation similar to that offered by my friends Senators Graham and Cassidy were it the product of extensive hearings, debate and amendment. But that has not been the case. Instead, the specter of September 30th budget reconciliation deadline has hung over this entire process.

"We should not be content to pass health care legislation on a party-line basis, as Democrats did when they rammed Obamacare through Congress in 2009. If we do so, our success could be as short-lived as theirs when the political winds shift, as they regularly do. The issue is too important, and too many lives are at risk, for us to leave the American people guessing from one election to the next whether and how they will acquire health insurance. A bill of this impact requires a bipartisan approach.

"Senators Alexander and Murray have been negotiating in good faith to fix some of the problems with Obamacare. But I fear that the prospect of one last attempt at a strictly Republican bill has left the impression that their efforts cannot succeed. I hope they will resume their work should this last attempt at a partisan solution fail.

"I cannot in good conscience vote for the Graham-Cassidy proposal. I believe we could do better working together, Republicans and Democrats, and have not yet really tried. Nor could I support it without knowing how much it will cost, how it will effect insurance premiums, and how many people will be helped or hurt by it. Without a full CBO score, which won't be available by the end of the month, we won't have reliable answers to any of those questions.

"I take no pleasure in announcing my opposition. Far from it. The bill's authors are my dear friends, and I think the world of them. I know they are acting consistently with their beliefs and sense of what is best for the country. So am I.

"I hope that in the months ahead, we can join with colleagues on both sides of the aisle to arrive at a compromise solution that is acceptable to most of us, and serves the interests of Americans as best we can."

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Cassidy-Graham could cause 32 million to lose insurance after 10 years

The Cassidy-Graham bill would cause millions to lose insurance, a new estimate says. Photo: J. Scott Applewhite/AP

An estimate released today by the Brookings Institution found the Cassidy-Graham health care plan would cause 32 million people to lose health coverage in 2027 and beyond compared to current law. Over the next two years, 15 million would lose coverage. Then, from 2020-2027, 21 million would lose coverage, which Brookings said is a conservative estimate.

Why this matters: This could give Senate GOP holdouts yet another reason to oppose the bill. Brookings is a liberal think tank, but it has been pretty close to the mark in predicting other Congressional Budget Office estimates. (We won't get an official CBO estimate of coverage losses for Graham-Cassidy because there's not enough time.) Just as importantly, it reiterates the fact that we really don't know how states would react.

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The key states that would lose funding under Graham-Cassidy

Alaska Sen. Lisa Murkowski. Photo: Cliff Owen / AP

A new estimate obtained by Axios from the Centers for Medicare and Medicaid Services (CMS) projects that Alaska, home to key swing vote Sen. Lisa Murkowski, would lose 38% of federal funding for premium subsidies and Medicaid by 2026 under the Graham-Cassidy proposal. John McCain's home state of Arizona would also lose funding (-9% in 2026).

Why it matters: Even though the CMS numbers are rosier than other estimates, they still show states like Alaska and Arizona would be worse off under Graham-Cassidy, making it that much harder to wrangle the votes needed to pass the last-gasp Republican plan.

  • Other estimates: Ohio (-18% by 2026), West Virginia (-23%) and Colorado (-24%), all home to senators who are under pressure over health care, would also lose funding. Sen. Susan Collins' state of Maine would gain 44% by 2026.
  • The latest: With moderate Republican Murkowski as potentially the crucial vote, Sens. Lindsey Graham and Bill Cassidy are reportedly considering three new Alaska-specific changes to the proposal to win her vote. These numbers won't help the sales pitch.

Worth noting: It's unclear whether the estimate includes traditional Medicaid funding.

Go deeper: The full estimates.

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Cassidy-Graham's potential trillion-dollar decision

The Cassidy-Graham bill sets up a terrible decision for conservatives down the line. Photo: Alex Brandon/AP

If the Cassidy-Graham health care bill becomes law, a future Congress is likely to have a horrible decision on its hands: somehow come to agreement on how to keep federal health care funding flowing to states, which potentially costs hundreds of billions of dollars; or let states lose all of the regulatory flexibility that led conservatives to support this bill in the first place.

The bottom line: "The message to Republicans is not to run for the Senate and be in the Senate in 2026, because you'll have a whole bunch of shitty votes to be taken," a senior GOP aide told me.

The arrangement, experts said, would set up a choice between a potentially multi-trillion dollar health care package, or an almost guaranteed death spiral in the individual market along with a reversion to many the Affordable Care Act's policies.

"If Graham-Cassidy passes, it would set us up for the mother of all health care debates in 2026," Larry Levitt of the Kaiser Family Foundation said.

The key provision: The Senate's bill, sponsored by Sens. Lindsey Graham and Bill Cassidy, would convert federal health care funding into block grants to the states. The bill also would make it much easier for states to waive some of the Affordable Care Act's insurance regulations.

Experts say it also ties the two together: Regulatory waivers only apply to insurance companies that receive some money from the block grants, or whose customers do. The block grants are set to expire in 2026. If they do, the waivers would vanish, too.

Go deeper: To preserve the block grant funding and, thus, the waivers, could cost a future Congress trillions of dollars. In 2026, block grants cost $190 billion, according to a Kaiser estimate. So even at a conservative growth rate, extending the block grants for another 10 years could come with a nearly $2 trillion price tag.

Yes, but: There's a budget rule that allows congressional budget committees and the administration to weigh in on whether the Congressional Budget Office assumes the block grants are temporary or permanent spending. If CBO is instructed to assume the latter (despite the bill clearly stating the funding ends), then Congress wouldn't have to pay to continue the block grants as long as they're frozen at the 2026 amount. It would, however, still have to pass a law — a very heavy lift given the politics.

On the other hand, let's say both federal block grants and state waivers expire. This probably means all of the ACA's consumer protection regulations would spring back into place, making health insurance more comprehensive and thus more expensive. But there would be no federal funding to help people purchase coverage. This is the classic recipe for a death spiral.

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What Graham-Cassidy means for pre-existing conditions

Illustration: Lazaro Gamio / Axios

Jimmy Kimmel's takedown of Sen. Bill Cassidy, and Cassidy's response, ripped open the question of whether the GOP's latest health reform bill protects people with pre-existing conditions. Cassidy and co-sponsor Sen. Lindsey Graham insist it does — as did President Trump in a tweet last night — but experts say that's not really the case.

The bottom line: The bill's funding cuts could pressure states — even blue states — to waive protections for sick people, as a way to keep premium increases in check. Older, sicker people in every state could end up paying more as states try to make up for a funding shortfall.

What the bill does: The bill wouldn't repeal the Affordable Care Act's rules about pre-existing conditions. But they might end up only existing on paper, the Kaiser Family Foundation's Larry Levitt said.

Graham-Cassidy doesn't let states waive the part of the Affordable Care Act that says insurers have to cover sick people. But it does allow states to opt out of several other ACA rules that can cause people with pre-existing conditions to pay more for their health care. Those provisions include:

  • The ban on charging sick people higher premiums than healthy people.
  • The requirement that insurers cover "essential health benefits," including prescription drugs. People who need expensive drugs might not have access to a plan that covers those drugs, requiring them to pay out of pocket.
    • Services that aren't "essential" benefits aren't subject to the ACA's ban on annual and lifetime limits.
  • The bill also would also loosen rules about how much insurers can raise their premiums because of a customer's age. (Older people are more likely to have pre-existing conditions.)

What supporters will argue: The bill requires states to say how their waivers would provide affordable and accessible coverage for people with pre-existing conditions. But there's no definition of what that means, and there's also no enforcement mechanism.

  • "The bottom line is these protections are much more at risk under this bill than they are now," said Cori Uccello, a senior health fellow with the American Academy of Actuaries.

Another level: At least theoretically, because the bill gives states so much control, a more liberal state like California might choose to preserve more of the ACA's regulations than, say, Alabama. But this bill would radically redistribute federal health care funding — generally away from blue and purple states and toward red states. Those cuts could back blue states into seeking more expansive waivers.

  • Caroline Pearson of Avalere told me: "if you have less money, you either cover fewer people, or you cover the same amount of people with less generous coverage. People with pre existing conditions are very reliant on having access to affordable insurance and need insurance that is comprehensive. So if a bill reduces the availability of comprehensive insurance, people with chronic conditions are going to be disproportionately harmed."