Hoeven Statement on Graham-Cassidy Health Care Bill and CBO Analysis

WASHINGTON – Senator John Hoeven released the following statement on the Graham-Cassidy-Heller-Johnson (GCHJ) health care reform legislation and Congressional Budget Office (CBO) analysis.

“Obamacare has raised health care costs and limited choice, which is why we’re working to provide relief for American families. We need to reform our health care system to provide Americans with access to patient-centered health care and health insurance at an affordable rate,” said Hoeven. “This legislation repeals and replaces Obamacare and helps restore the ability of Americans to choose the health care coverage that best fits their needs. The legislation is supported by Governor Burgum and will provide North Dakota with additional resources and greater flexibility to meet health care needs in our state, including supporting those who rely on Medicaid and Medicaid expansion.”  

Provides Additional Resources, Greater State Flexibility for North Dakota

According to the Department of Health and Human Service (HHS), under the legislation, North Dakota will get approximately $700 million more in funding between 2020-2026, while also saving $372 million in state funding otherwise required to receive federal Medicaid expansion funds under current law. Under Obamacare’s Medicaid expansion, tax credits and cost-sharing reductions, North Dakota would get $3.56 billion between 2020-2026. Under the GCHJ model, North Dakota would get $4.26 billion between 2020-2026. 

The net effect includes:

  • Frontier States Contingency Fund 
  • 100% FMAP for Medicaid-eligible Native Americans ($50 million per year, or a total of $350 million total from 2020-2026)
  • A risk adjustment overlay is expected to benefit North Dakota and others.  North Dakota could be eligible to receive a total of up to $120 million
  • One year of a two-year $25 billion short term stabilization fund to help stabilize insurance rates of which North Dakota could expect to receive a total of approximately $50 million.

Beginning in 2020, the legislation converts federal money spent on Medicaid expansion, tax credits, and cost-sharing reductions into a flexible block grant that a state can use to: 

  • Supplement its Medicaid program 
  • Assist individuals with paying premiums and out-of-pocket costs
  • Establish a reinsurance program
  • Pay health care providers
  • Enter into agreements with insurers to encourage market participation

Specifically, the Graham-Cassidy-Heller-Johnson legislation:

  • Repeals the individual and employer mandates
  • Repeals the costly medical device tax and Obamacare’s limitations on the use of health savings accounts
  • Provides greater flexibility for states to innovate and reduce health care costs through a streamlined waiver process 
  • Expands the use of health savings accounts
  • Protects patients with pre-existing conditions
  • Continues to allow individuals to stay on their parents policy until age 26
  • Continues support for Medicaid under a per-capita payment system. From 2020-2024, the inflator would grow at CPI-Medical +1% for elderly and blind/disabled individuals, and at CPI-Medical for children and non-disabled, non-elderly adults. Beginning in 2025, the inflator would grow at CPI-Medical for elderly and blind/disabled, and at CPI-U for children and non-disabled, non-elderly adults
  • Provides states with greater flexibility to utilize their resources more effectively and ensure that low-income individuals – including those currently covered under Medicaid expansion – are able to access health insurance
  • In 2018 and 2019, there are no changes to Medicaid expansion or the tax credits so states have adequate time to implement the health care reforms

Relative to the CBO Analysis

  • CBO analysis indicated that millions more people would be uninsured under the legislation. The legislation repeals the mandate that requires individuals purchase health insurance. This means individuals will not be forced off insurance, but may choose not to sign up. 
  • Obamacare created inequities for states by allocating more funding to a few states. CBO’s analysis shows under GCHJ funding is shifted to states on a more equitable basis.