What did the President Just Say?? – Say Ahhh! A Children’s Health Policy Blog

On Monday, while addressing the nation’s Governors,
President Obama endorsed bipartisan legislation introduced by Senators Wyden, Brown and Landrieu that moves up the date that states can apply for
so-called “State Innovation Waivers” from 2017 to 2014.

Waivers come in many shapes and sizes and can be quite
confusing. (Just watch Members of the House Energy and Commerce Health
Subcommittee try to wrap their heads around waivers at today’s hearing if you need any convincing on that fact.) So the first point that needs to be made is that this is no
“fait accompli”.  Congress would
have to enact legislation to amend the Affordable Care Act to change the date of when these waivers would become available. We don’t know exactly how the
Congressional Budget Office would score this, but The New York Times quoted a
figure of $4 billion – not an insubstantial figure. And given
that the House of Representatives seems focused on a course of repeal not amend, it seems hard to
imagine them coming up with any money to make a change that many House leaders would reject as meaningless anyway.

What are State Innovation Waivers? State Innovations
Waivers are a new, and at this point theoretical, option.  They were created by the Affordable
Care Act and currently the statute states that they would not become available until 2017.
State Innovation Waivers are not Medicaid and CHIP waivers but rather an opportunity for states to request a waiver of provisions of the new law related
to exchanges, benefits and cost-sharing protections. A state could apply for
this new waiver through a coordinated process with a Section 1115 Medicaid
and/or CHIP waiver thus marrying the two into a “super waiver” proposal – hence
some of the confusion.  But
otherwise, the Wyden-Brown-Landrieu legislation really doesn’t impact the
current Section 1115 Medicaid and CHIP waiver process.

Here is how a fact sheet from the White House accompanying
the President’s remarks describes State Innovation Waivers:

Under the Affordable Care Act, State Innovation Waivers
allow States to propose and test alternative ways to meet the shared goals of
making health insurance affordable and accessible to all Americans, including
those living with pre-existing conditions.  Specifically, State Innovation
Waivers are designed to allow States to implement policies that differ from the
new law so long as they:

  •  Provide
    coverage that is at least as comprehensive as the coverage offered through
    Exchanges – a new competitive, private health insurance marketplace.
  •  Make
    coverage at least as affordable as it would have been through the Exchanges.
  • Provide
    coverage to at least as many residents as the Affordable Care Act would have
  • Do not
    increase the Federal deficit.

The fact sheet goes on to say that the law also allows
States to submit a single application that includes Medicaid waiver requests
which could, for example, seek to give people eligible for Medicaid the choice
of enrolling in Exchange plans. This line may have caused more  confusion
because the Heritage Foundation, among others, has called for states to be
allowed to move Medicaid beneficiaries into the exchange, receive federal tax
credits in lieu of being Medicaid beneficiaries. But I don’t think the Affordable
Care Act allows that. What this statement means to me is that a state could
choose to use exchange plans as a delivery system for Medicaid as long as
Medicaid beneficiaries continued to receive the benefits and the cost-sharing
protections for which they are eligible (in other words, as long as they remain
Medicaid beneficiaries).

So the next step is to see whether Congress takes up this

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