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Blue Shield of California expresses strong opposition to the Senate’s newest healthcare proposal

BY GARY COHEN – Blue Shield of California’s nonprofit mission is to ensure all Californians have access to high-quality health care at an affordable price. That is the lens we use to view all healthcare policy proposals. Unfortunately, the Cassidy-Graham proposal that the U.S. Senate may soon consider runs counter to our mission because, in part, it would cause millions of people to lose their health insurance coverage.

Today, our CEO and President Paul Markovich sent a letter to the California Congressional Delegation to express our strong opposition to the proposal. He also encouraged them to continue working on a bipartisan solution that makes health care sustainably affordable and preserves coverage for the most vulnerable among us. Blue Shield of California has long advocated for sound healthcare reforms and will continue to support healthcare policy that moves us toward universal coverage for all Californians. The full text of the letter is included below.

Gary Cohen is vice president of government affairs at Blue Shield of California

September 21, 2017

Dear California Congressional Delegation:

Our mission at Blue Shield of California is to ensure that all Californians have access to high quality health care at an affordable price.  We have consistently maintained that this is the standard against which we measure all health care policy proposals.  We are therefore writing to express our strong opposition to the Cassidy-Graham proposal that the Senate may soon consider.  We believe this proposal will cause millions of Californians to lose their health insurance coverage while requiring major state tax increases over the long-term to fund basic levels of access. This would undo much of the substantial progress California has made expanding coverage in recent years.

We believe there was merit to the original structure proposed by Senator Cassidy and Senator Collins earlier this year, which would have allowed states the choice to either maintain the Affordable Care Act or create a new market structure supporting auto-enrollment with block-granted funds.  Senator Cassidy structured this bill to bridge the partisan political divide.  He said, “At some point in this process, we will need a bill that can get to 60 votes.  Now you can say to a blue-state senator who is invested in supporting Obamacare, ‘You can keep it, but why force it on us?’”[i]  This basic structure would have allowed states, as the laboratories of democracy, to attempt different models with sufficient funding to maintain—or even increase—coverage.

The new bill from Senator Cassidy and Senator Graham proposes an entirely different structure, which would bring about an unprecedented cut and redistribution of federal funding.  Paradoxically, because of California’s success in reducing the percentage of uninsured, our state will feel the brunt of the extreme cuts in spending this bill would mandate.

Independent estimates show that California would see a $78 billion cut by 2026, when compared to current law.[ii]  In contrast, Texas—which has done little to expand coverage to the uninsured—would receive a $35 billion increase.[iii]  In total dollars, California would see nearly $30 billion more in cuts than any other state.  As with previous repeal and replace bills, the result would be that lower-income individuals and families trying to work their way into the middle class would lose their insurance coverage. The proposal would also cut off funding entirely in 2027.  While supporters say that this considerable appropriation will be re-authorized easily, if recent history is a guide, the need to reauthorize what would be a $2 trillion program will instead lead to even more political turmoil and uncertainty for those with coverage and for states seeking to provide health care to their most vulnerable citizens.

In short, none of us need an official CBO score to know that funding reductions of this magnitude will ultimately lead to millions of Californians losing coverage.  No amount of state flexibility nor promises of future government action can possibly fill that financial void.  We should all be seeking ways to maintain and expand coverage to high quality, sustainably affordable health care.

We continue to believe that bipartisan compromise can result in improvements to these critical health care programs that will make them sustainably affordable and fiscally responsible in the long-term, while preserving coverage for the most vulnerable among us.  The recent Alexander-Murray hearings have shown remarkable agreement among diverse stakeholders around areas of potential compromise, including funding the cost-sharing reduction benefit, providing more flexibility for states to innovate within appropriate guardrails, and addressing high-cost enrollees.  We believe Congress should continue to focus on building from areas of consensus rather than again pursuing a partisan and divisive path.

We recognize that we still have further to go to guarantee affordable coverage for all Californians.  However, this bill would take us further away from that goal, and for that reason we strongly oppose it.


Paul Markovich
President and CEO
Blue Shield of California

[i] Vox, “Cassidy-Collins, the GOP replacement plan that lets liberal states keep Obamacare, explained,” January 24, 2017.
[ii] Avalere Analysis of Cassidy-Graham Bill, September 20, 2017.
[iii] This is true even though analyses show that California is a donor state in federal taxes while Texas currently receives more back from the federal government than it pays.  See Dallas Morning News, “Texas Can No Longer Complain that It Gives More Than It Gets from the Federal Government,” August 2012.