Section 1332 of the Affordable Care Act (ACA) is a powerful policy tool for states in the Trump era. The provision authorizes states to waive certain ACA provisions and receive federal funding for state programs, provided such proposals meet four guardrails. Specifically, these guardrails are that the waiver must:
- Provide coverage to at least as many people as would be provided without the waiver.
- Provide coverage that is at least as comprehensive as would be provided without the waiver.
- Provide coverage that is at least as affordable as would be provided without the waiver.
- Not increase the federal deficit.
A handful of states have received federal approval to operate a state-run reinsurance program starting in 2018, and a few more could follow the same template for 2019. A number of other states have explored a state-run reinsurance waiver program, but have been unable to implement one for a variety of reasons, including a lack of enabling legislation or inadequate levels of federal pass-through funding (in the form of premium tax credit subsidies).
Individual Mandate Repeal; Revised Guidance Forthcoming?
With the effective repeal of the individual mandate and potential expansion of plan options (e.g., short-term limited duration insurance, association health plans) that are not counted as single risk pool coverage in the small group and individual markets, 2019 is shaping up to be another year of uncertainty and premium rate increases. As a result, Section 1332 state innovation waivers will continue to be an important policy tool at a state’s disposal.
Moreover, long-awaited revised federal guidance from the Department of Health and Human Services (HHS) and the Department of the Treasury is expected to bring states additional viable ideas for reforming their markets through innovation waivers. Such guidance could:
- Streamline the application process for states, particularly for those with look-alike waivers that adopt an approach taken by an already-approved waiver.
- Explicitly provide for a broader interpretation of the statutory guardrails.
- Announce new operational capabilities for states which rely on the federal platform (HealthCare.gov) to enroll residents into subsidized coverage.
These new capabilities could open up a host of variations in qualified health plan design, eligibility parameters, and enrollment platforms, including an increased role of third-party sites, including state websites, web brokers, and other settings where consumers can be reached.
State Innovation Waiver Tracker
To help stakeholders continue to keep tabs on these proposed waiver programs, FaegreBD Consulting’s health policy team has once again put together a chart that briefly summarizes such state innovation waivers, including those that may be approved for 2019 implementation. Updates will be made periodically as waivers make their way through the required state and federal review processes and additional states develop their own proposals. In addition, FaegreBD Consulting looks forward to the release of any new 1332 guidance for states and to discussing its implications for stakeholders.