Today, the Center for Medicare and Medicaid Services released new guidelines for Obamacare’s 1332 waivers. (here) The Affordable Care Act contains two broad areas that are open to Administrative interpretation. These are Section 1332 state waivers and Section 1115A Medicaid waivers. Under these two sections, the current Administration can make significant changes in the implementation of the ACA without action by Congress.

The current administration has encouraged states to apply for 1332 waivers. (here) It believes these waivers can relieve states of the most harmful effects of the ACA, including the onerous premium price increases and the regulatory burden. The law states that “the Secretary shall determine the scope of a waiver…” within the limits of “the authority of the Secretary.” States can file for a 1332 waiver after January 1, 2017 and the Department of Health and Human Services has six months in which to approve or disapprove them. Waivers last for five years, but can be renewed.

 Waiver requirements for state plans are that they must:

• Remain cost neutral overall;

• Not add to the federal deficit;

• Provide for public input;

• Offer health insurance at least as comprehensive as the exchanges;

• Offer plans that cost the same as exchange plans;

• Provide health insurance for the same number of people as the ACA;

• A state legislature must pass a law to request the waiver.

According to the ACA, the “Secretary shall determine” the amount of money each state receives based on the amount the state would have received in federal subsidies through the health insurance exchange. States have the ability to opt-out of the waiver even after the waiver is approved.

From today’s CMS press release:

“Today’s guidance marks a new direction that delivers the flexibility the law always intended for states. To begin, the guidance outlines five principles for states to follow as they work to develop innovative new approaches. Moving forward, state waivers should aim to: provide increased access to affordable private market coverage; encourage sustainable spending growth; foster state innovation; support and empower those in need; and promote consumer-driven healthcare. 

The new flexibilities available to states include the following: 

• Allows states to provide consumers with plan options that best meet their needs, while, at the same time, ensuring people, including those with pre-existing conditions, retain access to the same level of coverage available today without the waiver;   
• Continues to require that a comparable number of people have coverage, but expands the definition of coverage to include more types of coverage, such as short-term plans;
• Provides greater flexibility for states to consider improvements in comprehensiveness and affordability for state residents as a whole versus the prior focus on specific populations;
• Supports increased variation and flexibility for states that may want to leverage components of the Federal Exchange platform to implement new models;
• Provides flexibility for states to meet the state legislative authority requirement.

The guidance clarifies that in certain circumstances, existing state legislation that provides statutory authority to enforce ACA provisions and the state plan, combined with a duly-enacted state regulation or executive order, may satisfy the requirement that the state enact a law.”  

 In spite of the 20 million “newly” insured, Obamacare has been a clear policy failure. Except for the enrollees in the Medicaid entitlement, virtually every person with health insurance in the U.S. has experienced a significant increase in insurance premiums. Millions have lost insurance plans they liked, lost access to their doctors, and have seen their deductibles go up. The bright promises made by the Obama Administration to the American people when the ACA passed have not turned out to be true.

State 1332 waivers offer patients a greater number of lower cost options for health care than the rigid regulations in Obamacare. The federal Administration understands this and has encouraged states to apply for these waivers. By expanding their use, states have more flexibility in using 1332 waivers for the benefit of their citizens.