The critical flaw in Graham-Cassidy is that it bore the potential to make health insurance markets worse, not better, because due to design flaws in the bill, most states would have been strongly incentivized to eliminate their private individual insurance markets and replace them with an enlarged expansion of Medicaid, a program whose enrollees have health outcomes no better than those who are uninsured.

The Consensus Group proposal improves upon Graham-Cassidy by requiring that “at least 50% of the block grant goes toward supporting people’s purchase of private health coverage” in the individual insurance market. Under the new program, states would be required to offer Medicaid enrollees the opportunity to purchase “commercially available coverage” with their Medicaid dollars, and plans sold under the block grants would be exempted from costly Obamacare rules, like 3:1 age bands that double or triple the cost of insurance for young people.

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