Graham-Cassidy isn’t ObamaCare repeal, but revisions will make it palatable

The Senate appears to be moving closer to a vote next week on the amendment offered by Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.), with only days left to pass a health insurance reform bill through reconciliation.

Two committees will also hold hearings on the amendment, achieving something similar to the “regular order” demanded by some Republicans, including Sen. John McCain (R-Ariz.).

{mosads}There are several provisions of Graham-Cassidy that conservatives can embrace. The amendment increases the maximum allowable contribution for health savings accounts (HSAs) and allows individuals to pay for their health insurance coverage out of their HSA. It also modernizes Medicaid, putting the more than 50-year-old program on a budget and limiting its annual growth.

Still, Graham-Cassidy is not ObamaCare repeal, nor does it represent the true principles of federalism. But it is the last serious opportunity for health insurance reform under reconciliation, which allows the Senate to bypass the filibuster. After more than seven years of promises, this amendment is the last hope.

Grassroots conservatives are understandably underwhelmed by Graham-Cassidy, and no one can blame them. A Republican-controlled Congress passed legislation in December 2015 to repeal ObamaCare, only to see it vetoed by President Obama, a result that everyone expected. But grassroots conservatives took the votes and campaign promises to repeal ObamaCare seriously, only to watch a vote on a 2015-style repeal amendment receive only 45 votes in July.

If Graham-Cassidy is the path forward, as short as it falls of those repeated promises to repeal ObamaCare, Senate Republicans must improve certain aspects of it to ensure that states are given enough flexibility to waive ObamaCare regulations that are driving up the cost of health insurance coverage.

The current text of Graham-Cassidy does allow states to waive certain ObamaCare regulations, but states that request these waivers must explain plans to “maintain access to adequate and affordable health insurance coverage for individuals with pre-existing conditions if such waiver is approved.”

Given the restrictions on the use of block granted funds, which are provided to states for the purpose of assisting high-risk individuals in buying coverage, this qualifier is unnecessary. Secretary Price may be amenable to state waiver requests, but the secretary of the Department of Health and Human Services under a different administration may not be. More deference must be given to states to waive these costly ObamaCare regulations, and the waivable regulations must be more clearly defined.

Although the proposed Medicaid modernization has been a long-desired goal of conservatives, the rate at which Medicaid will grow needs to be phased in. Under the current text of Graham-Cassidy, per capita allotments for childless, able-bodied adults would grow at the rate of CPI-Medical between 2020 and 2023. Beginning in 2024, these allotments would grow at a slower rate, CPI-U.

The concern with the growth rate is that it sets up a potential cliff in 2024 when the slower growth rate takes effect. This creates a potential scenario in which Congress delays the new growth rate. Congress did this routinely with Medicare’s Sustainable Growth Rate, passing a “doc fix” to delay cost controls. Congress can proactively prevent a similar scenario by amending Graham-Cassidy to phase in the transition to the slower growth rate.

Finally, Graham-Cassidy is being hailed as a federalist approach to addressing the many problems with ObamaCare. Let’s be clear here. Graham-Cassidy isn’t true federalism as defined by the Tenth Amendment, which states, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

The federal government still controls the money, and, in the current text, it still determines whether or not a state can waive certain ObamaCare regulations. The approach Graham-Cassidy takes may be an improvement over ObamaCare, but it’s grounded in a twisted definition of federalism.

Majority Leader Mitch McConnell (R-Ky.) is close to getting the 50 votes needed to pass Graham-Cassidy. Hopefully, revisions will be made to improve the amendment. But conservatives aren’t going to give up on ObamaCare repeal. If this amendment eventually passes and becomes law, it should be considered only a step toward repeal. It can’t be considered the conclusion of this more than seven-year effort, because it simply isn’t.

Jason Pye is the vice president of legislative affairs for FreedomWorks.