Feds Announce Changes to Section 1332 Waiver Guardrails

October 30, 2018

On October 22, 2018, the U.S. Department of Health and Human Services and the Department of Treasury (Departments) released new guidance on Section 1332 waivers.  Section 1332 waivers allow states, contingent upon federal approval, to waive certain requirements of the Affordable Care Act (ACA).  Wisconsin recently used the section 1332 waiver process to secure approval for the new Health Care Stability Plan reinsurance program. 

The guidance identifies new priorities that will be considered as the Departments review waiver applications for plan year 2020 and beyond. New principles include: 

  • Providing increased access to affordable private market coverage (including association health plans and short-term plans) over public programs;
  • Increasing insurer participation and promoting competition;
  • Promoting more cost-effective coverage, restraining growth in federal spending, and eliminating state regulations that limit market choice and competition; and,
  • Promoting consumer-driven health care.
A major shift from current procedure is that the Departments will no longer evaluate whether actual coverage purchased under the waiver is comparable to the ACA in terms of covered services and affordability.  Instead, the Departments will focus on whether residents have access to comprehensive and affordable coverage.  In other words, states can seek waivers to provide access to less comprehensive or less affordable coverage compared to the ACA. 

Under previous guidance, the Departments explicitly accounted for effects across different groups of state residents. The new guidance will focus only on the aggregate effects of a waiver instead of the effect on any particular group of individuals. 

The guidance goes into effect immediately, but the Departments are accepting public comment on the guidance for 60 days. The American Hospital Association released a statement noting concerns about consumer protections and potential impacts on the individual health insurance market.  WHA is preparing public comment to submit to the Departments.

This story originally appeared in the October 30, 2018 edition of WHA Newsletter