A last-ditch effort to repeal the Affordable Care Act (ACA) fell apart after Senate Republicans said they didn't have enough votes to approve the measure.

The Graham-Cassidy bill, which would have eliminated federal funding of the ACA and given a set amount of money to states to help with health insurance costs, was subject to a flurry of changes over the past few days as Republicans tried to win over Senate GOP holdouts.

But after Sen. Susan Collins (R-Maine) announced late Monday she was joining GOP Senators John McCain (R-Ariz.) and Rand Paul (R-Ky.) in opposing the legislation, it became clear the Senate wouldn't be able to get the 50 votes needed to pass it by this Saturday's deadline.

Republicans, however, vowed to renew the battle to repeal the ACA in the coming fiscal year, which begins Oct. 1.

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Republican senators, including Lindsey Graham (R-SC), co-sponsor of the Graham-Cassidy bill, said they will try to include healthcare overhaul plans in a 2018 budget bill along with a Republican tax reform package.

"There's no reason you couldn't do health care and taxes at the same time," Sen. Paul said Monday

An analysis of Graham-Cassidy by the Congressional Budget Office, released Monday evening, didn't help the GOP case for the bill. Though the CBO found the legislation would reduce the federal budget deficit by $133 billion by 2026, it said that millions of people with high-cost medical conditions would no longer have comprehensive health insurance coverage by 2026. 

The CBO, which didn’t take into account the latest changes to the legislation, said the number of people who won’t have insurance could vary widely depending on how states implemented the legislation, but that the “direction of the effect is clear.”

The drop in the number of people with health insurance would come from large cuts in federal funding for Medicaid, a reduction in subsidies to help people buy health insurance, and the elimination of a federal mandate that requires all people to buy health insurance.

According to the CBO, the drop in coverage would be partly offset by enrollment in new programs that states could set up with the block grants from the federal government. But the CBO warned that given the short amount of time to set up new state health insurance programs, there would likely be implementation problems that would further disrupt insurance markets.  

How the GOP Tried to Win Votes

Although much of the bill was the same as a draft released last week, there were some significant changes made over the last few days aimed at winning over GOP holdouts, says Tim Jost, a health policy expert and emeritus professor at Washington and Lee University School of Law, who analyzed the latest proposal. That includes:

  • More funding for certain states. It would have provided substantially more money and a revision of Medicaid funding formulas to benefit specific states, including Alaska, Arizona, Kentucky, and Maine, where GOP Senators have either said no or expressed concerns about the bill, Jost says. Those changes apparently didn't go far enough. Although the additional money would partly offset federal funding cuts to those states, there would still be less money overall because it doesn’t take into account the bill’s proposal to cap Medicaid spending, according to an analysis by the Kaiser Family Foundation, a nonprofit organization focused on health-policy issues. 
  • More leeway for states to design healthcare plans. Unlike the previous version of the legislation, states would no longer have to submit waivers to get approval for key changes but could just submit a description of how the plans would work. For example, it would allow states to change the federal cap on out-of-pocket spending for people. It would also allow states to define what benefits insurers would have to offer and to charge people higher rates based on their health status. 

Giving states more control would enable them to allow insurers to offer a variety of policies with lower premiums and different benefit options but would also enable them to roll back consumer protections mandated by the ACA, such as not being able to charge people with pre-existing health conditions more for health insurance.

“If there was any question about Graham-Cassidy’s removal of federal protections for pre-existing conditions, this new draft is quite clear,” says Larry Levitt, a senior vice president at the Kaiser Family Foundation.

The Graham-Cassidy legislation faced vocal opposition outside the Senate as well. Monday afternoon the Senate’s finance committee held a hearing on its bill that was repeatedly interrupted by protestors. A number of consumer groups, healthcare providers, insurers, and a bipartisan group of governors came out against the proposal as well.