New Waiver Concepts May Prove Problematic for Some Insurers

By Leslie Small

In keeping with its mission of loosening the Affordable Care Act's rules for the individual insurance market, the Trump administration on Nov. 29 offered up four examples of how states can use Section 1332 of the ACA to accomplish that goal.

If a significant number of states end up embracing the more transformative concepts — like changing how subsidies work — that might make it more challenging for health insurers that sell plans in multiple states' ACA exchanges, experts tell AIS Health. However, some are skeptical that state uptake will be very high in the first place, so insurers may not have to worry too much.

The four "State Empowerment and Relief Waiver Concepts," as CMS calls them, are:

Account-based subsidies, in which a state directs public subsidies into an account that individuals can use to pay for health insurance premiums or other health care expenses;

State-specific premium assistance, under which states can create a new, state- administered subsidy program;

Adjusted plan options, which would allow states to provide financial assistance for non-ACA-compliant plans; and

Risk-stabilization strategies, which gives states more flexibility to implement reinsurance programs or high-risk pools.

In Justin Giovannelli's view, states that adopt the waiver concepts will likely face steep barriers.

The Trump administration's own discussion paper about the four waiver concepts demonstrates that "there are a ton of operational and policy questions that states are going to have to grapple with" if they want to use the new flexibilities, says Giovannelli, an associate research professor and project director at the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute.

But in the event that a meaningful number of states do actually implement waivers overhauling their individual markets, it will create even more variation among those markets than is seen today, Standard & Poor's analyst Deep Banerjee tells AIS Health.

"What that means is for an insurance company that's participating in multiple states, they have to be able to adapt to different guidelines in each of the states, which we think gives a little bit of an edge to local-market insurers compared to national insurers," he says.

From Health Plan Weekly