Experts Say HHS Guidance on ACA Waivers Reduces States’ Options
Policy experts say that HHS' new guidance on the Affordable Care Act's "innovation" waivers are so restrictive that it could be difficult for some states to secure the waivers, Modern Healthcare reports (Dickson, Modern Healthcare, 12/15).
Through a "state innovation" provision -- Section 1332 of the ACA -- states can use federal funding intended for the ACA to redesign their state health care systems. The provision is set to take effect in 2017.
To be granted a waiver, states would have to cover about the same number of residents as the ACA, as well as continue to provide comprehensive benefits and financial safeguards against ruinous costs. Redesigned programs must be budget neutral. In addition, states could not allow insurers to deny coverage to individuals based on their pre-existing conditions.
States that meet these requirements would be able to:
- Change or eliminate penalties for those without insurance, as well as companies that do not provide their employees insurance;
- Change subsidies and benefits;
- Scrap their exchanges; and
- Combine the innovation waiver with proposals for programs such as Medicaid and the Children's Health Insurance Program.
In addition, HHS last week published new guidance which clarified that redesigned plans sought through the waivers:
- Cannot decrease the number of people enrolled in Medicaid or CHIP;
- Cannot decrease the number of people receiving plans that cover ACA's 10 essential health benefits; and
- Must ensure that health plans available under the redesigned system be about as affordable for residents as plans offered through the ACA's exchanges.
Further, HHS noted it would deny any proposals that would result in coverage losses.
In addition, the guidance appears to prohibit waivers that would eliminate the ACA's individual or employer mandates in the states (California Healthline, 12/15).
Stakeholders, Experts Weigh In
Katherine Hempstead, director of health insurance research at the Robert Wood Johnson Foundation, said, "States were looking at [the waivers] as a magic carpet, and with this guidance, what they got was a subway token."
The National Governors Association expressed disappointment with the guidance, which it said "is pretty far from the flexibility ... governors asked for."
Deborah Bachrach -- a partner at the law firm Manatt, Phelps & Phillips -- said, "Unfortunately, the guidance speaks more to what cannot be done than what can be done."
According to Modern Healthcare, the federal government's restrictions on allowing states to use savings from one waiver to balance expenditures in another could be the most limiting factor for states seeking the exemptions.
Yevgeniy Feyman, a fellow at the Manhattan Institute, said, "Red states would probably do something along the lines of spending more on Medicaid and less on the exchange population to balance that out. But that's effectively impossible to do now." He noted that the guidance "takes most of the bite out of the waivers" (Modern Healthcare, 12/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.