Last week, Sens. Lindsey Graham (R-SC) and Bill Cassidy (R-LA) released the text of a new bill to repeal and replace the Affordable Care Act (ACA) that would replace funding for Medicaid expansion and private insurance subsidies with $1.2 trillion in block grants to states.

Senate Majority Leader Mitch McConnell (R-KY) has asked the Congressional Budget Office (CBO) to score the bill, indicating that Senate leadership is seriously considering the legislation. CBO is expected to release a score early next week.

Under budget reconciliation rules, the Senate needs 51 votes to pass the legislation and must vote on the bill before Sept. 30, the end of the fiscal year. However, several Senate Republicans either have expressed skepticism about the measure or have not yet said whether they support it. If it is not passed by the end of the month, the bill would require 60 votes for passage or lawmakers would have to introduce the bill under a new reconciliation process.

America’s Essential Hospitals on Sept. 15 released a statement expressing concern about the legislation. The association urged Congress to focus, instead, on bipartisan efforts to resolve time-sensitive health policy issues, including stabilizing the individual insurance market, funding the Children’s Health Insurance Program (CHIP), and stopping impending cuts to Medicaid disproportionate share hospital (DSH) payments.

Insurance Market Stabilization

With a wary eye on the Graham-Cassidy legislation, senators continue to negotiate a stabilization package for the fiscal year (FY) 2018 insurance marketplace.

The Senate Committee on Health, Education, Labor and Pensions held two more hearings on market stabilization last week, with Chair Alexander Lamar (R-TN) hinting that a deal on a bipartisan bill would come this week. Such a deal would allow the Senate to pass the measure by the end of the month, with open enrollment beginning on Nov. 1.

Meanwhile, CBO has released a report on FY 2017-2027 health insurance subsidies for individuals younger than 65. The report estimated that premiums for the ACA’s benchmark silver plans will increase by an average of 15 percent in 2018 due to market instability.

The administration so far has made cost-sharing reduction payments on a month-to-month basis, but it ultimately will need to make a more permanent decision by Sept. 27, when insurers are due to sign contracts with the government for 2018 plans.

Senate Panel Agrees to CHIP Funding Plan

The Senate Committee on Finance has advanced proposed legislation to extend CHIP funding for five years. The proposal would maintain the ACA’s 23 percent increase in the federal matching rate to states for 2018 and 2019, decreasing the rate in 2020 and eliminating it in 2021. The text of the bill is expected this week.