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What’s in the New GCHJ Bill?

The Graham-Cassidy-Heller-Johnson ( GCHJ ) healthcare bill is the latest Republican effort to repeal and replace the Affordable Care Act (ACA or Obamacare). On September 20, President Donald Trump endorsed the bill, saying it was the best option for replacing the ACA.

What is the GCHJ Bill?

The GCHJ plan proposes block grants given to states in lieu of the existing federal funding under Obamacare. States would then be able to use decide how that money is spent. Senator Lindsey Graham said that the new measure would allow states to determine the best way to help their sick rather than leaving it to a “bureaucrat in Washington.” The bill would eliminate many parts of the ACA and overhaul other sections of current law. Medicaid expansion and subsidized insurance coverage are two notable areas that would be eliminated.

Potential Loss in State Funding

According to the Center on Budget and Policy Priorities, California would lose the most funding – over $27 billion, according to their estimates. However, the office of Senator Bill Cassidy, who co-wrote the bill, released estimates that were much different. Their numbers indicate that Massachusetts would lose the most in funding but only $5 billion. States that chose not to expand Medicaid under the ACA would receive more in federal funding with a large number of states losing nothing under the plan.

Differences from ACA

The GCHJ is significantly different from Obamacare. The bill repeals individual and employer mandates, which are the penalties levied on those who do not have health insurance and large employers who do not offer affordable coverage. The penalty would be completely eliminated under the GCHJ and make it retroactive to 2016.

In addition, all insurance subsidies and Medicaid expansion funding would be eliminated in the next few years. Like the ACA, the bill would require insurers to provide coverage for those with pre-existing conditions, but it would allow insurers to charge more based on medical conditions depending on how a state implemented its program.

The GCHJ also eliminates the essential health benefits provision, which required that all health insurance policies cover 10 essential benefits, like maternity care, prescriptions and mental health care.

First Stage of the Bill

If the bill is passed, it will be implemented in three stages. Current tax credits under the ACA would remain in place through 2019. However, the individual mandate would not only be repealed but would be eliminated retroactively to 2016 with nothing in place to encourage healthy people to remain insured. The bill also does not compensate insurers for reductions in deductibles and other cost-sharing features. There is funding included designed to stabilize the market, but analysts believe it’s not enough and could lead insurance markets to collapse before 2020 in some states.

Second Stage of the Bill

The second phase of the GCHJ would begin in 2020 with funding to states reallocated using a formula that is very complex, but is loosely based on each state’s portion of the population with incomes between 50 and 138 percent of the federal poverty level. This could result in several states, especially the four receiving the largest share of Medicaid funding, losing a significant amount of federal funding.

States that see an increase would need to draft state legislation and administrative rules, and could even need to create agencies to administer the funds. Before they could do that, however, they would need to wait for the federal government to adopt rules on the block grants, something that may be difficult before 2020.

Final Stage of Bill

In 2027, all appropriations and funding expire, requiring Congress to pass legislation establishing a new healthcare program as well as a method for funding the program. States that expanded programs under the GCHJ could face significant funding shortfalls in just a decade.

Effect on Americans

According to the Commonwealth Fund, 15 to 18 million people would be uninsured by 2019. But it’s important to note that this number mainly comprises individuals who would choose not to have health insurance if it was not required. After 2026, the uninsured estimate rises to 26 million due to elimination of the Medicaid expansion and insurance subsidies lost under the bill. It’s also estimated that premiums could increase between 15 and 20 percent in the first year as insurers would view the market pool as “less healthy” without the individual mandate.

Impact on Insurance Companies

On Wednesday, September 20, powerful insurance lobby America’s Health Insurance Plans and Blue Cross Blue Shield announced that they did not support the GCHJ. The announcement stated that the bill contained provisions that would eliminate basic consumer protections as well as safeguards for those with pre-existing conditions. The organizations also felt that the bill increases uncertainty in the insurance market, increases the cost of coverage and reduces choices in the healthcare marketplace. Both organizations favor a bipartisan approach to fixing the ACA rather than repealing large portions of the bill. In addition to insurance companies who have spoken out on the bill, the American Medical Association, American Hospital Association and the AARP have all come out against the new legislation.

Time Limit

In order to pass the bill without a filibuster under Senate rules, the bill must be passed by September 30. Many experts are concerned that the bill will be passed without close scrutiny as Republicans are desperate to make good on campaign promises to repeal and replace Obamacare. The Congressional Budget Office report will not be ready before September 30, so the Senate will need to vote on the bill without that office’s estimates on economic impact.

Time is running out for Republicans to uphold one of the key promises they made during the presidential campaign and the last seven years. Many experts say that this version of the Republican healthcare plan is not significantly different than those proposed earlier this year and that just as many Americans stand to lose coverage under the GCHJ legislation. However, some experts say that they believe Republicans will vote for the bill simply because it is their last chance to make good on their campaign promises since they may be unable to do so after September 30.