ACA News

View 2020 Virginia
Obamacare Rates
  • Check new plans & 2020 rates
  • See if you qualify for free subsidies
  • Start today to avoid delays!
View Rates and Enroll ›

The Graham-Cassidy Bill (GCHJ) – Yay or Nay?

On September 13, four Republican senators released a last-ditch healthcare reform proposal that’s been taking conservative Congress members by storm. The effort, dubbed the “GCHJ bill” after its sponsors – Lindsey Graham (SC), Bill Cassidy (LA), Dean Heller (NV) and Ron Johnson (WI) – will face significant challenges as it races its way through the Senate. That’s because the upper chamber has until September 30 to pass a reform bill under reconciliation rules, which require only a simple majority (50 votes plus the tie-breaker from Vice President Pence if necessary). At last count, the GCHJ bill was shy a couple votes, but its sponsors are hopeful.

A time crunch notwithstanding, the GCHJ will also need to clear several hurdles in its path to President Trump’s desk. Moderate Republican lawmakers like Susan Collins of Maine and Lisa Murkowski of Alaska will undoubtedly object to the bill’s take on abortion, and outspoken conservative Rand Paul of Kentucky is no fan of the current effort either.

Democratic critics and the left have already blasted the bill for its shortcomings. But there are some positives worth noting about this latest attempt by rightwing senators to reform America’s healthcare system. While we wait for the Congressional Budget Office to score the Graham-Cassidy-Heller-Johnson bill, here are pros and cons to consider.

Advantages of the GCHJ

State choice

Under the GCHJ proposal, states would be offered a choice in how to proceed with healthcare reform. As it stands, all states had to adopt the federal guidelines provided for under Obamacare, with the notable exception of Medicaid expansion, which was ruled a states issue by the Supreme Court. Aside from Medicaid expansion, ACA provisions were adopted on a national level. The Graham-Cassidy bill hands power back to the states in designing their own programs. This means that states could:

  • Continue to operate their ACA programs as-is
  • Change their healthcare systems to suit their needs
  • Implement a new system entirely
  • Rework features of Obamacare that they like while eliminating what they don’t

It’s a compromising feature of the bill that some object to, most significantly Rand Paul of Kentucky, who has dubbed this latest effort “Obamacare Lite” (as he has dubbed other Republican efforts over the last eight months). In terms of choice, however, this bill allows for states to keep Obamacare in place, develop a new system or work with what they have while still retaining federal funding for assistance.


Because states can now develop their own healthcare systems, they may be encouraged to compete with other states – and competition spurs innovation. Similar success stories happened in the mid-1990s after welfare reform was implemented with the support of former Senator Rick Santorum, who has also been a voice in the ear of GCHJ legislators. Since then, several states have adopted more effective and efficient welfare programs to actually address poverty and reduce it, rather than dump unchecked funding into social services. GCHJ supporters are hoping that allowing states to pursue individual reform efforts could transform healthcare nationwide better than a series of federal mandates ever could.

More equitable funding

Under this new proposal, more states would get more funding from the federal government. It’s true that some states would see a reduction in funding. California, Maryland, Massachusetts and New York – just four states – currently receive 37 percent of all Obamacare funding in the form of Medicaid expansion and tax subsidies. They stand to lose the most because they draw the most. The GCHJ eliminates the current funding model and instead provides block grants to states based on a complex calculation involving the number and type of customers enrolled in health insurance plans.

Block grants have the power to force states to make significant changes to their programs, again encouraging them to innovate in order to save money and redistribute the funding more equitably across needed areas.

No mandates

One particularly unpopular aspect of Obamacare – individual and employer mandates – will be eliminated under the Graham-Cassidy bill. The individual mandate requires most Americans to hold health insurance or face a penalty come tax time. In 2017, that penalty is the greater of $695 per adult or 2.5 percent of your household’s taxable income, and it rises with inflation each year. Employers with more than 50 full-time workers also must offer ACA-compliant healthcare coverage, a provision that some argue has stunted business growth, and forced smaller large organizations (like schools) to limit hours or keep employees to a limited work status.

Absent the individual and employer mandates, consumers may feel better about choosing policies that work for them rather than coverage that guarantees benefits they don’t want or need. Businesses especially will celebrate the fact that they no longer have to provide costly insurance to their employees, the savings for which they may be able to pass on in the form of higher paychecks and better hours.

Stronger HSAs

Senator Cassidy has also suggested that coupling the GCHJ proposal with the so-called “Ted Cruz Amendment” – which allows people to pay for premiums using tax-advantaged health savings accounts (HSAs) – would help people afford coverage that they otherwise wouldn’t be able to. Whether and how the use of HSAs plays into the new Republican proposal isn’t clear, but Republicans have been promoting this idea for years. Stronger HSAs could potentially help middle- to higher-income families save money for healthcare without having to buy costlier insurance plans.

Drawbacks to the Graham-Cassidy Effort

Despite some noteworthy positives about the GCHJ bill, there are obvious downsides to this proposal, and it’s no surprise that the bill has been met with everything from skepticism to outright criticism from both sides of the political spectrum.

No mandates

Listed among our pros list, the lack of individual and employer mandates is also a big disadvantage for the healthcare system in terms of long-term funding and plan cost. Without a mandate or incentive of any kind in place to force people to buy coverage, many won’t. In fact, The Commonwealth Fund suggested that 15 to 18 million people would drop coverage in 2019 based on numbers gathered from previous Congressional Budget Office reports.

Healthy people need to buy health insurance in order to offset the cost of care for sicker customers, an idea that inspired the individual mandate in the first place. It hasn’t been a good tactic, but it’s the one that’s currently being used to try and drum up business under Obamacare. Insurers depend on premiums from healthy (and younger) customers to cover care for more expensive enrollees. It’s one reason that premiums have skyrocketed over the last four years. There’s not been enough participation among the young and healthy to keep premiums down.

But absent any motivation to enroll, younger customers probably won’t, preferring to spend their money elsewhere and simply sign up when they need coverage. It’s a shaky system, and it could lead the individual health insurance market to collapse – and quickly.

A more conservative approach

Conservative Republicans tend to support policies that center on personal freedom, which is why they object so strongly to proposals that enhance or bolster federal involvement in issues like healthcare reform. Rand Paul, a staunch opponent of any proposal that doesn’t completely eradicate Obamacare and all of its provisions, has decried the GCHJ bill as yet another in a long line of moderate attempts at repeal-and-replace. While GCHJ does share some qualities with previous efforts, the new bill is actually more conservative in a couple of ways, including its stance on:

  • Individual and employer mandates
  • Health savings accounts (HSAs)
  • Abortion coverage

We’ve discussed the mandate issues, and we’ve highlighted the pros of bolstering HSA accounts for middle- and high-income families. But HSAs are unlikely to be attractive to most families, especially those with limited incomes and limited ability to save money even with tax-advantaged accounts.

Drafters of the GCHJ bill are hoping that states will partially fund HSAs using some of the federal block grants that they receive, but this isn’t a guarantee. And most people in the U.S. won’t see increased HSAs as an advantage because, simply put, Americans don’t save money. Last year, a survey by found that the average American had less than $1,000 in savings. Most people don’t have money to spare when saving for small home repairs, let alone medical emergencies.

The new GCHJ bill also eliminates federal funding for abortion providers, which will upset more moderate members of the Republican Party and bar any support from Democrats. Abortion is a broad topic and covers a lot of ground in terms of funding and other factors. But it’s worth noting here that given the GCHJ’s take on the issue, this bill will face significant resistance from moderate and leftwing lawmakers based on this factor alone.

No time

The biggest challenge to the Graham-Cassidy-Heller-Johnson effort is time. In order to vote on and pass the bill under reconciliation rules, senators need a score from the Congressional Budget Office (CBO), and they don’t have time to get full marks. The CBO has already said that it would take weeks to generate a proper score. Republicans have about a week left until their September 30 deadline.

In the meantime, the CBO plans on releasing a bare-bones score that answers at least the most critical question: Does the GCHJ bill reduce the national deficit at least as well as the American Health Care Act (AHCA)? The AHCA was passed by the House over the summer but failed to make its way through the Senate. If the GCHJ doesn’t save as much money as the House-passed bill, then it can’t be passed using budget reconciliation, which is critical to ensuring that Republicans can bypass filibuster tactics that would stall reform.

Time is not on the side of Republican lawmakers. With just over a week left until the deadline for passing a reform bill under budget reconciliation, proponents of the GCHJ are hoping that this latest effort will draw enough support to get something accomplished. Given that the tone in Congress – not to mention the public – has shifted to a bipartisan approach to reform, success seems unlikely.