Waiving Hello to State Innovation? – Say Ahhh! A Children’s Health Policy Blog

In a continued push to show that states have flexibility
under the Affordable Care Act, the Departments of Health and Human Services and
the Treasury this week proposed rules for states to apply for innovation
waivers under section 1332 of the ACA.  Under current law, states could
negotiate a waiver of ACA provisions (like the requirement to operate health
insurance exchanges) beginning in 2017, but the Administration and some
Senators have supported moving the date up to 2014.  States would have to ensure that the benefits would be
comparable to those provided by ACA and could not increase the federal deficit.  It remains unclear whether Congress will
act on this acceleration of the date.

The proposed rules reiterate what President Obama
explained in a speech to governors:  States seeking waivers will have to
show that their plans would provide coverage as comprehensive and to as many
people as would be provided without a waiver.  States with waivers would be able to access the federal
funding that would otherwise flow to individuals as tax credits under ACA.   States will have to provide
actuarial and economic analyses to support their proposals and provide
opportunities for public input.

Whenever the state innovation waivers become effective,
it’s important to remember that states possess a variety of waiver authorities
relating to health coverage programs. 
(They’re usually named after the section of the Social Security Act that
describes them.)  Here’s a quick

  • Section 1915 gives states authority to seek waivers of
    many provisions of Medicaid law, often used for providing managed care or home
    and community based services. 
  • Section 1115 allows states to engage in research and
    demonstration projects that are “likely to assist in promoting the objectives”
    of the Medicaid program. Its even possible for states to
    request waivers from Medicare law. 
  • Section
    1332 authority, the subject of the proposed rules, applies to a range of
    requirements in the ACA. 

While each waiver category is different, the proposed
rules also allow states to combine Section 1332 waiver applications with others
they may want to pursue at the same time. 
A state will be able to use a single application to propose waivers
under these different authorities. 
States will still have to meet the requirements of each section, but all
the waivers–and their combined effect on health coverage–will be considered

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