The Graham-Cassidy bill would reallocate funding now devoted to the Affordable Care Act exchanges and the law’s expansion of Medicaid and give it to states in the form of block grants. States in theory would have great flexibility to create their own health care systems, though only two years to do it.The block grants would grow according to an index lower than general inflation — not according to how many people are covered or what diseases they have — so the total pot would grow more slowly than under current law. All funding would be terminated by 2027, unless Congress acted at the time to continue it.

“The Graham-Cassidy bill would significantly reduce funding to states over the long term, particularly for states that have already expanded Medicaid,” said Caroline Pearson, senior vice president at Avalere. “States would have broad flexibility to shape their markets but would have less funding to subsidize coverage for low- and middle-income individuals.”

Graham-Cassidy-Heller-Johnson Bill Would Reduce Federal Funding to States by $215 Billion http://avalere.com/expertise/managed-care/insights/graham-cassidy-heller-johnson-bill-would-reduce-federal-funding-to-sta