Tag Archive: Section 1332 waiver

States that opted not to set up exchanges have opportunity to go their own way in 2017

Nearly three dozen states opted not to operate their own health benefit exchanges serving the individual and small group markets starting in 2014. In these states, the federal government became the default exchange operator under a provision of the Patient Protection and Affordable Care Act that’s invoked if states decline to establish an exchange. Typically red states hostile to the health reform law, these states also aren’t keen on other provisions of the law such as the individual and employer mandates. An Affordable Care Act provision that takes effect next year allows them to apply to the federal government to dispense with these mandates and the individual and small business exchanges as well as other major ACA health insurance market reform elements.

Section 1332 of the law affords states broad latitude to create their own health insurance programs serving individuals and small employers for coverage beginning in 2017. Section 1332 waivers even provide states federal funding for them, paying states what they would otherwise receive in the form of advance tax credit premium assistance payments to state residents to subsidize premiums for coverage purchased through exchanges.

The freedom and the federal funding come with some important provisos. According to federal guidance issued in December 2015, states must provide coverage for a comparable number of their residents and on terms that are as comprehensive and affordable as would be the case without the waiver. Funding for the states also cannot increase the federal deficit. The waivers would be for renewable five year periods.

While health plan issuers would still be barred from medical underwriting, states could even do away with foundational insurance market reforms such as those defining small and large employer group markets and those that affect rating such as a single statewide risk pool, rating territories and limited annual enrollment periods.

For those states that defaulted to the federal government to operate their exchanges, the guidance makes clear that if they want a Section 1332 waiver to set up their own state programs, they will be making a clean break with any federal government involvement other than monitoring to ensure they comply with the major waiver provisos. They would not be permitted, for example, to continue using the federal eligibility and enrollment portal, healthcare.gov, or to receive some modified form of advance premium tax credits in support of their programs. Nor could they mix Section 1332 funding with any federal Medicaid funding received under a state Section 1115 Medicaid waiver, according to the guidance.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Colorado becomes second state to consider ACA Section 1332 waiver to fund single payer health insurance

A recently approved ballot measure will give Coloradans the final say on whether to scrap the state exchange in favor of a single-payer system.

Source: Colorado voters set to decide the fate of health exchange – StateScoop

Colorado becomes the second state where the Patient Protection and Affordable Act’s Section 1332 waiver could be used to fund a single payer system starting in 2017. In this case, it would take the form of a proposed state-sponsored health insurance cooperative funded by a 6.67 percent employer payroll tax that’s up for voter ratification in November 2016.

According to the story, the tax would raise $25 billion per year. If the federal government approves the Section 1332 waiver — which allows states to opt out of public health benefit exchanges and the shared responsibility mandates on individuals and employers if the state can provide coverage that’s as accessible and affordable as under the Affordable Care Act — another $11.6 billion in federal funding could be provided annually to fund ColoradoCare.

Vermont was the first state that planned four years ago to transition from the exchange to a single payer system in 2017 under the 1332 waiver. That plan was abandoned early this year due to concerns over its financial viability and burden on the small New England state’s budget. In more populous Colorado and its larger tax base, it could be easier for the numbers to pencil out.

For a state-based single payer system, a key determinant of its actuarial viability is likely to be the health status of its residents. The numbers look propitious in the Rocky Mountain State, which has a strong outdoor exercise activities culture and ranks high on health status indicators nationally.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Arkansas could be leader state on ACA Section 1332 waiver — but must act quickly

If Arkansas wishes to opt out of Patient Protection and Affordable Care Act requirements governing individual and small group health insurance market reforms and propose an alternative plan under Section 1332 of the law, it must act quickly in order to have such a plan in place by January 1, 2017 as allowed under Section 1332, a consultant’s report recommends. On that date, Arkansas’s existing federal waiver allowing it to use expanded Medicaid eligibility funding to subsidize the purchase of qualified health plans on its health benefit exchange expires at the same time it plans to launch a state-based exchange. The 1332 waiver could also be combined with a new Medicaid Section 1115 waiver as part of an omnibus reform plan as permitted by federal rules, depending on how the state chooses to provide medical coverage to its low income and medically frail residents.

Section 1332 provides for state innovation giving states the flexibility to opt out of most Affordable Care Act individual and small group health insurance market reforms including the 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 employed shared responsibility provisions.

To qualify for a waiver from the federal government, states must demonstrate their programs would ensure individual and small group plans would offer coverage at least on a par with plans providing the 10 essential health benefits prescribed by the ACA. State programs would also have to ensure individuals and small employers would have access to coverage with affordable premiums and protections against “excessive” out-of-pocket costs (such as annual maximums) like those for ACA plans and cover a comparable number of residents as existing ACA plans.

States granted Section 1332 waivers are eligible for “pass through” federal funding operating like an annual block grant. The funding would cumulatively represent what state residents would otherwise receive under ACA rules for premium tax credits, cost-sharing reductions and small business credits.

Given the complexity of assessing various policy and waiver options and preparing and vetting the application, the report prepared by Public Consulting Group recommends Arkansas enact the required authorizing legislation to seek the waiver by June 2015 and to submit the waiver application to the federal government by October 2015. (H/T to Elizabeth Osius of Manatt, Phelps & Phillips, LLP for writing about the report).

“Section 1332 Waivers are new territory in state and federal healthcare policy. No such waiver has been applied for, denied, or approved as of the date of this writing,” the April 6, 2015 Public Consulting Group report notes. “Interpreting and negotiating what is permissible under Section 1332 will gain its first precedents in the months ahead. This paper serves to help assess options and plan activities should Arkansas wish to be the first, or among the first, to submit an application.”

According to the report, some of the policy options Arkansas could implement under a Section 1332 waiver include:

  • Continuous enrollment for individual plans instead of annual open enrollment periods;
  • Offering Medicaid plans on the state health benefit exchange;
  • Allowing employers to issue tax exempt vouchers to employees to purchase individual coverage;
  • Reduced penalties for large employers offering “skinny” plans that do not meet ACA employer shared responsibility requirements for minimum affordable coverage;
  • Liberalized eligibility requirements for those wishing to purchase catastrophic plans with less than 60 percent actuarial value.
 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Arkansas exploring creating alternative state health plan

Arkansas, which pioneered the so-called “private option” to use expanded federal Medicaid funding under the Patient Protection and Affordable Care Act to subsidize commercial insurance plans sold on the state’s health benefit exchange, is also out front among states when it comes to preparing to potentially exercise an Affordable Care Act option to opt out of key requirements of the law starting in 2017 and set up its own plan to provide health coverage to low and moderate income households.

The Arkansas Health Reform Legislative Task Force created by Act 46  signed last month by Gov. Asa Hutchinson will work on developing an alternative health care coverage model by the end of this year, replacing the private option as of Jan. 1, 2017.

“Notwithstanding any other rule, regulation, or law to the contrary, the Department of Human Services may submit and apply for any federal waivers or authority necessary to transform the Arkansas Medicaid Program into a program with maximum state flexibility in the use of the funds for innovative and cost-effective solutions for the provision of healthcare services,” Act 46 states. Among the options to be studied is obtaining a federal block grant to fund the alternative program.

Section 1332 of the Affordable Care Act titled Waiver for State Innovation allows states to petition the U.S. Department of Health and Human Services for a waiver to opt out of key ACA requirements beginning in 2017 including the state health benefit exchange, premium tax credit subsidies and cost sharing reductions for plans sold on the exchange as well as the individual and employer “shared responsibility” mandates. States receiving a Section 1332 waiver would be eligible for “pass through” funding operating like an annual block grant. The funding would cumulatively represent what state residents would otherwise be eligible to receive under ACA rules for premium tax credits, cost-sharing reductions and small business tax credits if they are ineligible for them under the state programs.

The Section 1332 waiver comes with some provisos. States opting out of the ACA rules would have to demonstrate their programs would ensure individual and small group plans offer coverage at least on a par with plans providing the 10 essential benefits prescribed by the ACA. State programs would also have to cover a comparable number of residents as well as ensure individuals and small employers have access to coverage with affordable premiums and protections against “excessive” out-of-pocket costs.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Romney accuses Obama of ‘fundamental dishonesty’ on health-care law – The Washington Post

Mitt Romney stepped up his attack on President Obama’s health reform program on Sunday, accusing the president of “fundamental dishonesty” that has “undermined the foundation of his second term.”

The harsh comments from Obama’s 2012 rival follow repeated attempts by the Obama administration to liken the current measure, known as Obamacare, to the health reform law that Romney championed as Massachusetts governor.

“The president failed to learn the lesson that came from the experience of Massachusetts,” Romney said on NBC’s “Meet the Press.” His state’s efforts showed the merits of avoiding a “one-size-fits-all plan,” Romney said. “States should be able to craft their own plans.”

via Romney accuses Obama of ‘fundamental dishonesty’ on health-care law – The Washington Post.

Actually, states are able to craft their own plans under the Patient Protection and Affordable Care Act starting in 2017.  As I recently blogged, Section 1332 titled Waiver for State Innovation allows states to petition the U.S. Department of Health and Human Services to opt out of major ACA provisions including the individual and employer mandates and the requirement to have a health benefit exchange marketplace. While not intended by the Obama administration, the U.S. Supreme Court’s June 2012 ruling in NFIB v. Sebelius also gave states the option to expand Medicaid eligibility under the law.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

ACA mandates, exchange marketplace could be temporary, 3-year phenom under state waiver provision

Partisan disagreement over the Affordable Care Act’s individual and employer mandates and state health benefit exchange marketplace has jammed the gears of the federal government machinery, leading to a partial government shutdown that began this week. All the strum und drang over these ACA provisions, however, could end up being over a temporary circumstance lasting only three years in at least some states.

Beginning in 2017, ACA Section 1332 titled Waiver for State Innovation allows states to petition the U.S. Department of Health and Human Services for — as the title suggests — a waiver allowing them to opt out of these requirements. The waiver also extends to premium tax credit subsidies and cost sharing reductions for plans sold on the exchange marketplace.

That means states that don’t like the ACA’s approach to restoring their individual and small group markets to functioning can devise their own programs after three years of complying with federal mandates.

The Section 1332 waiver comes with some provisos. States opting out of the ACA rules would have to demonstrate their programs would ensure individual and small group plans would offer coverage at least on a par with plans providing the 10 essential benefits prescribed by the ACA. State programs would also have to ensure residents and small employers have access to coverage with affordable premiums and protections against “excessive” out-of-pocket costs (such as annual maximums) like those for ACA plans and cover a comparable number of residents as ACA plans.

Section 1332 also provides federal funding to aid states opting out of the ACA rules to set up their own programs. States receiving a Section 1332 waiver would be eligible for “pass through” funding operating like an annual block grant. The funding would cumulatively represent what state residents would otherwise be eligible to receive under ACA rules for premium tax credits, cost-sharing reductions and small business credits if they are ineligible for them under the state programs.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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