Tara
O'Neill Hayes October 23, 2018
The Affordable Care Act (ACA) set substantial
new federal requirements for health insurance plans and the insurers that
provide them, but it also included in Section 1332 the option for states to
apply for a waiver from many of these regulations. The statute and subsequent
regulations set myriad stipulations for these 1332 State Innovation Waivers, however, and as
a result only eight states have taken advantage of this option—with all but one
implementing a state reinsurance program. Congressional efforts to ease access to these waivers
floundered last year, but the Trump Administration has issued new guidance that
gives states significantly more flexibility for obtaining waivers. This
guidance prioritizes choice and access over coverage—a substantial shift from
previous policy.
The Centers for Medicare and Medicaid Services
(CMS) released new regulatory guidance for 1332 waivers on
October 22nd, 2018, that replaces the guidance issued in 2015 under
the Obama Administration—addressing many of the problems that Congress was
trying to fix. In the guidance, CMS laid out five principles against which new
waiver applications will be considered, in addition to the statutory
requirements. These principles include the proposal’s likelihood of: increasing
access to affordable private market coverage, encouraging sustainable spending
growth, fostering state innovation, supporting and empowering those in need
(particularly individuals with low income and those with high expected medical
costs), and promoting consumer-driven health care.
The new guidance loosens some of the current
regulatory requirements to provide states greater flexibility in how they meet
the law’s mandates. The ACA requires that insurance offered under any state
waiver be expected to achieve four outcomes, and the new guidance redefines how
those outcomes will be assessed. These four outcomes include:
- providing “coverage that is at least as comprehensive”
as that required to be provided by a qualified health plan (QHP);
- ensuring that coverage includes cost-sharing
protections that make it “at least as affordable” as a QHP;
- providing “coverage to as least a comparable number of
its residents” as would be covered without the waiver; and
- not
increasing the federal deficit.
The most noteworthy difference in the new
guidance pertains to the third requirement: providing coverage to a comparable
number of people. For one, the administration will consider the number of
individuals expected to be covered in each year under the waiver, but it may
approve a state plan that could reduce the number of people covered in one year
if it believes the number of people covered long-term will be at least as high
as expected without the waiver. Second, the Trump Administration is
reinterpreting the ACA’s language to allow for this requirement to be met even
if people are covered under less comprehensive (yet more affordable) plans. The
new guidance distinguishes between the first two requirements regarding
comprehensiveness and affordability and this third requirement. It does so by
noting that the third is a separate requirement and the language does not
explicitly state that a comparable number of people must be covered by plans
that are as comprehensive and affordable as would otherwise exist. Rather, the
coverage requirement may be met so long as a comparable number of people
have some form of coverage, and that coverage may include
newly available types of coverage, such as a short-term limited duration plan or
an association health plan.
In contrast, the first two provisions regarding
comprehensiveness and affordability will be considered concurrently: Coverage
options under the waiver must include plans that are both as comprehensive and
affordable as without the waiver (as opposed to allowing a state to offer some
plans that are comprehensive but not affordable and vice versa). That said,
these requirements may be considered met if such plans are available to
a comparable number of people as without the waiver, regardless of the number
of people expected to enroll in them; the Trump Administration is referring to
this as a new “access standard.” This change underscores the administration’s
desire to ensure a range of options are available and thereby allow individuals
to choose the coverage that is right for them. This change also supports the
changes that allow people enrolled in less comprehensive or affordable plans to
count toward the coverage requirement.
The new guidance also relaxes how much weight is
given to a waiver’s impact on certain subpopulations. The Obama Administration
required that certain vulnerable populations, including low-income individuals,
elderly individuals, those with serious health issues, and those at risk of
developing serious health issues be protected against possible losses of
coverage. It also required that the new options be as affordable and
comprehensive for these specific populations, as well as that these populations
be expected to enroll in such coverage. While the Trump Administration will
still consider the impact on such subpopulations, they will allow the impact to
the state’s population as a whole to take precedent over “small detrimental effects”
to particular groups. States will still need to have plans “to support and
empower” individuals with low income and with high expected health care costs,
however.
Regarding the plan’s impact on the federal
budget, the new guidance removes the Obama Administration’s language stating
that an increase in the federal deficit in any particular year may cause the
waiver to be denied. Thus, as required by the statute, states will simply have
to show that the plan will not increase the deficit over the course of the
waiver (which may be up to five years) and will be budget neutral over the
10-year window, under the assumption that the waiver is in effect permanently.
State governors have been seeking this change, as they have noted that costs
are typically highest at the beginning of a new program as a result of one-time
start-up costs; thus, there may be a cost increase in the first year that could
be offset by decreases in later years.
Finally, the ACA requires that any state seeking
a waiver pass its own law providing the state authority to enact and implement
the waiver’s plan. The new guidance stipulates that this requirement may be
satisfied through the combination of a state law and regulation or executive
order. This leniency accommodates states whose legislatures do not meet every
year or only for part of the year and that thus may have difficulty passing
legislation within the needed timeframe.
Aside from these regulatory changes governing
the law’s implementation, CMS has also stated in this guidance its intent to
publish “Waiver Concepts” that will serve as waiver application templates.
Several state officials have requested such templates, as they could ease the
application process and reduce the burden on states.
Key committees in Congress considered legislative changes to address some of
these issues as well as others, but those efforts stalled in committee. The
administration has made clear, through its numerous health care regulations,
its support for providing people more choices and fewer restrictions, and these
changes are intended to provide such flexibility and choice, to the extent
possible through regulatory changes. While some members of Congress have sought
other changes to the 1332 waiver requirements that that only they can enact,
this new guidance likely resolves many of the concerns the committees attempted
to address.
https://www.americanactionforum.org/insight/trump-administration-offers-states-more-flexibility-on-health-insurance/#ixzz5VjjyJWb8
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