New Waiver Guidelines Issued for ACA Plans

Rules would allow states to request permission to subsidize health plans that do not comply with ACA coverage requirements.

The Trump administration yesterday announced changes to the ACA’s state innovation waiver rule that opponents worry would put vulnerable populations at risk. Karen Pollitz, the senior fellow on health reform and private insurance at the Kaiser Family Foundation, said in an interview this morning that the Obama administration would evaluate waiver requests not only on how they might affect a total population, but also on how they might affect people with low incomes or who have pre-existing conditions. “Under this new guidance, the most vulnerable residents could be disadvantaged as long as, in the aggregate, at least as many people have coverage,” Pollitz said.

The change was announced yesterday by CMS Administrator Seema Verma in an address to the States and Nation Policy Summit of the American Legislative Exchange Council in Washington, D.C.

“Seeing the problems the ACA created and seeing the lack of federal action to address these problems should be proof enough for why it was such a mistake to federalize so much of health care policy under the ACA,” Verma said.

Technically, the changes mean renaming Section 1332 of the ACA the “State Relief and Empowerment Waiver.” Under the changes, according to CMS, states can develop a new premium structure under which they can theoretically give more people access to a health plan. In addition, states can create risk stabilization strategies that would reduce the costs for high-risk individuals.

“Today, we are saying the states have the power to make the individual markets work through innovative policies that best meet the needs of your citizens,” Verma said.

Pollitz will wait and see what states do with the new wiggle room on waivers, but she has concerns because it allows states to restructure subsidies in significant ways. For instance, the waivers could be used to fund “some non ACA-compliant plans, like short term health plans, which are roughly half the cost of ACA-compliant policies.”

Such plans offer less comprehensive benefits and can deny coverage to people with pre-existing conditions, however. “The administration is clearly signaling with these additions that even if states redistribute the strength and affordability of the coverage so that some of the most vulnerable people are disadvantaged, they would entertain the waivers that cover the same number of people,” Pollitz said.