Taking action and providing states options to minimize economic burden created by the ACA
Ever since the Patient Protection and Affordable Care Act’s (PPACA) main requirements were implemented in 2014, individual health insurance markets across the country have been struggling. Premiums have doubled and even tripled in some states. Insurers began abandoning state and regional markets leaving large portions of the country with only a single insurer, and insurers are increasingly focused on offering narrow provider networks to contain premium growth.
Faced with these serious market problems, on day one, President Trump issued an executive order that directed agencies to take actions to minimize the economic burden of the PPACA and “to provide greater flexibility to States and cooperate with them in implementing healthcare programs.”
Under the President’s clear leadership, in 2018, the Centers for Medicare & Medicaid Services (CMS) and the Department of the Treasury (collectively, the Departments) issued new guidance announcing policy changes that increase states’ flexibility to waive certain ACA requirements. The Departments also released four waiver concepts that illustrate how states might take advantage of this flexibility. By releasing these concepts, the Departments hope to spur further conversations with states and encourage innovative thinking on how states can take action to strengthen their markets.
Today, the Departments are taking another step to prime discussions and are issuing a request for information (RFI) asking for more ideas on innovative programs and waiver concepts that states could consider in developing a State Relief and Empowerment Waiver plan (also referred to as
“Section 1332 waiver” or “State Innovation Waiver”).
Washington doesn’t have all the answers when it comes to our health care needs and, as experience with the PPACA shows, when Washington imposes a one-size-fits-all approach on every state, any problems with the approach become nationwide problems.
States are the laboratories of innovation and policy reform where new ideas can be tested and, when proven successful, can serve as national models. State leaders are also closer to their residents and better understand the problems they face each day, and this gives states the knowledge and the motivation necessary to take action and make the tough policy decisions needed. Importantly, State Relief and Empowerment Waivers provide an opportunity for states to get back in the driver’s seat.
The new guidance the Departments issued last fall gives states the flexibility they need to address problems in their market. The prior guidance issued by the previous administration proved to be unnecessarily restrictive for states, which may be why very few states have come forward with new ideas to improve their markets through Section 1332 waivers.
CMS then took the extra step and released four waiver concepts that provide states with some examples of how they might use these new flexibilities. The concept that may hold the most promise to address various structural problems with the PPACA would be to establish a defined contribution to an account that individuals would manage, and could use to pay both health insurance premiums and any out-of-pocket health expenses. CMS also outlined new flexibilities for states to 1) establish a new state-administered premium subsidy to address well known structural problems in the insurance markets; 2) give people access to more health plan options that could be supported by state subsidies to increase consumer choice and affordability; and 3) implement new strategies to address the costs of high risk individuals that maintain the same strong protections for people with pre-existing conditions while reducing premiums for everyone else.
Since the release of the guidance and waiver concepts, CMS has been actively engaging with states and other stakeholders interested in pursuing a waiver. We’ve held calls with governors, legislators, and state insurance regulators. And, we’ve held webinars and led technical assistance sessions with states. Through our regional offices in Atlanta and Chicago, we’ve hosted forums with states, with a third planned for Denver this month. These forums have been effective ways for states to learn how State Relief and Empowerment Waivers can be used in their state to reform their health care markets. They’ve also been a great venue to bring states together to share ideas with each other—and with the federal government.
Building off what we’ve learned from the regional forums we’ve held thus far, last week we also held a national meeting in Washington, D.C., which gave us the opportunity to connect with more than a dozen states and other stakeholders on the national level to discuss how states can take advantage of State Relief and Empowerment Waivers to transform their markets.
Ultimately, the goal here is to see states develop new waiver concepts and submit waiver applications that improve their health insurance markets. To help states with that process, CMS intends to build a library of options, through more waiver concepts, so that states have additional illustrative ways to take advantage of this new flexibility. Indeed, the four waiver concepts we released last fall were just the beginning.
That’s why today’s RFI is so important. Through this RFI, CMS—along with the Department of the Treasury—are asking for more ideas for new programs and waiver concepts for states to consider under a State Relief and Empowerment Waiver plan. Our hope is that these additional waiver concepts will foster further discussion and spur innovative thinking among states that drive toward real solutions to improve access to affordable coverage for all Americans.
In this RFI, the Departments are specifically asking for ideas for additional waiver concepts that states may be able to use to develop innovative waiver programs that meet the section 1332 guardrails, including the following possibilities:
- Waiver concepts that states could potentially use alone or in combination with other waiver concepts, state proposals, or policy changes;
- Waiver concepts that could advance some or all of the principles outlined in the 1332 Guidance released in 2018;
- Waiver concepts that incorporate the entire range of waivable requirements allowed under section 1332; and
- How states might combine the flexibilities available under 1332 with other flexibilities that exist under federal law, including regulatory flexibility, Section 1115 Medicaid waivers, as well as state law.
Comments for the RFI are due by July 2, 2019.
By taking advantage of a State Relief and Empowerment Waiver, states can chart a new course toward more affordable health insurance choices. I ask that you take the time to provide the important feedback we need to inform this process. These waivers give states the power and flexibility to improve their markets through innovative policies that best meet the needs of their residents. I believe in the states’ ability to make innovative decisions to improve the health of their residents and look forward to receiving ideas for other approaches through this process.