7 facts about the new ACA waiver program, for agents
Extra people covered could get limited-benefit coverage, and very low-income people could get APTC help.
The administration of President Donald Trump is forging ahead with efforts to revamp an Affordable Care Act program that could let each state change how its version of ACA health coverage access programs works.
Agencies today unveiled new guidelines for states that want to use the ACA Section 1332 State Innovation Waiver program.
In the past, under the administration of former President Barack Obama, federal regulators set tight limits on waiver use. States have used waiver authority mainly to set up state-run reinsurance programs for the individual major medical market.
Officials at the U.S. Department of The Treasury, the U.S. Department of Health and Human Services (HHS), and the Centers for Medicaid and Medicaid Services (CMS) say they now want to take a different, more flexible approach, and to promote use of products such as association health plan coverage and short-term health insurance.
Trump administration officials have been talking about making those sorts of changes to the Section 1332 waiver program since March 2017, when Tom Price, Trump’s first HHS secretary, announced an ACA waiver program reboot.
A preview copy of the 34-page PDF document is available here.
The official version is set to appear in the Federal Register Wednesday.
For a look at seven facts about the new waiver program guidance that might be of interest to insurance agents and brokers, read on.
1. The Section 1332 waiver program has a new name.
The Trump administration will be calling it the State Relief and Empowerment Waiver (SREW) program.
2. SREW application reviewers will have a strong preference for proposals that favor private-sector solutions.
In the past, Section 1332 waiver program drafters did not mention whether they preferred government-run health programs or private insurance programs.
Some lawmakers who have created ACA alternative bills and ACA change people’s have emphasized that they wanted to give each state the flexibility to meet local needs.
In the new SREW guidance, officials evidence that they want to promote more cost-effective health coverage, a lighter burden for the federal taxpayer, and use of private-sector solutions.
“For example,” officials write, “states should consider eliminating or reducing state-level regulation that limits market choice and competition in order to reduce prices for consumers and reduce costs to the federal government, as part of their section 1332 waiver applications.”
3. Trump administration officials say any extra people covered as a result of waiver programs can have less comprehensive coverage.
Obama administration officials said that a waiver program should increase access to coverage for at least some, decrease access for no one, and do nothing to reduce the level of benefits provided below the ACA individual major medical benefits minimum.
Trump administration officials argue that a careful reading of the coverage quality and access “guardrail” provisions in the ACA statute “require that coverage be provided to at least a comparable number of residents as would occur absent the waiver,” officials say. “However, the text of the coverage guardrail provision of the statute is silent as to the type of coverage that is required.”
4. SREW waivers could give states some new kinds of flexibility.
Under a waiver program, a state should make sure that the number of people who will have access to coverage that is both affordable and comprehensive will be at least as high as if the state had no waiver, officials say.
But additional people who get covered could have cheaper, less comprehensive coverage, such as AHP coverage or short-term medical insurance, officials say.
Application reviewers will continue to consider the effects of a waiver proposal on all categories of residents, but “the revised guardrails will give states more flexibility to decide that improvements in comprehensiveness and affordability for state residents as a whole offset any small detrimental effects for particular residents,” officials say.
Here’s what officials say about low-income people and people with health problems:
Some Americans, particularly those with low incomes or high expected health care costs, may require financial assistance. Policies in section 1332 waiver applications should support state residents in need in the purchase of private coverage with financial assistance that meets their specific health care situations.
5. SREW waivers would not be a magic wand.
Under the SREW waiver program, a state could not use the SREW waiver application to change Medicaid rules.
Officials say that they will be more likely to approve a waiver that makes coverage substantially more affordable for some people without making others substantially worse off than to approve a waiver that makes coverage slightly more affordable for some people but much less affordable for others.
Because of issues with Internal Revenue Service systems, a state probably cannot not make big changes in how the ACA advance premium tax credit (APTC) health insurance premium subsidy program works for state residents, unless the state sets up and runs its own alternative subsidy program, officials say.
But a state that has refused to use ACA subsidies to expand Medicaid to include all adults with income under 100% of the federal poverty level might be able to make the APTC subsidy available to people with incomes under 100% of the federal poverty level who do not qualify for Medicaid, officials say.
6. HealthCare.gov is more flexible than it used to be.
Officials say they may be able to offer states more freedom to tinker with certain health coverage eligibility rules and other parameters simply because the HealthCare.gov back-end systems are more flexible than they used to be.
7. Members of the public can weigh in on the guidance.
The guidance will take effect immediately, but members of the public can comment on the guidance.
Comments will be due 60 days after the official Federal Register publication date.
One way to file a comment is to submit the comment through the federal government’s Regulations.gov system.
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