Analysis: Senate’s health care cuts could top $4 trillion

Change in federal funding under Graham-Cassidy compared to current law, 2020-2026

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The Senate’s health-care overhaul would quickly pull $215 billion in federal funding out of the health care system, and those cuts could later grow as high as $4 trillion, according to a new analysis from the consulting firm Avalere Health.

Why it matters: Avalere is a respected and independent voice, and because the Congressional Budget Office won’t have time to completely evaluate the bill’s effects before a vote, this will likely be one of the best estimates we have available.

What Avalere found: The bill, sponsored by Sens. Lindsey Graham and Bill Cassidy, would redistribute federal health care dollars while also shrinking the overall pot. Avalere’s analysis looks at how the cuts would grow over time:

  • 2020-2026: Total federal spending would shrink by $215 billion; 34 states and Washington, D.C. would lose money, compared with the status quo, while seven states would get more.
  • By 2027, the total national cut would climb to $489 billion.
  • 2027-2036: Federal spending would shrink by more than $4 trillion, and every state would be getting less than they’re on track to get under current law.

Key caveat: The Graham-Cassidy bill would roll federal funding for the Affordable Care Act’s premium subsidies and Medicaid expansion into a single pool, then convert it into block grants to the states. Those grants are set to expire in 2026. Avalere analyzed the bill as written — with that money disappearing completely — but the bill’s supporters say Congress would obviously step in to authorize a new round of grants.

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