The federal government is adopting a more flexible stance on state applications for waivers under Section 1332 of the Patient Protection and Affordable Care Act, particularly for states that want to create state reinsurance programs and high risk pools. Citing President Donald Trump’s January 20, 2017 executive order directing federal agencies to exercise maximum discretion possible within the law to reduce economic burdens imposed by the Affordable Care Act, the Health and Human Services Agency today encouraged states to utilize the Section 1332 state innovation waiver process to fund state reinsurance plans and high risk pools. “If a state’s plan under its waiver proposal is approved, a state may be able to receive pass through funding to help offset a portion of the costs for the high risk pool/state-operated reinsurance program,” HHS Secretary Tom Price wrote in a letter to state governors today.
Few states have shown interest in pursuing a Section 1332 waiver given the burdens of providing coverage on a par mandated by the Affordable Care Act while not requiring more federal funding than would otherwise be available under the law. Section 1332 allows the federal government to authorize states to opt out of most the law’s individual and small group health insurance market reforms including requirements to have a health benefit exchange, that plans provide specified essential health benefits as well as advance tax credit premium subsidies and reduced cost sharing for those households meeting income criteria. Also waivable are the individual and employer shared responsibility mandates. A budget reconciliation bill pending before Congress would zero out the penalties for noncompliance with those mandates.
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