Feds Offer New Rules for States' ACA Waivers

The federal government has proposed new rules outlining what states may do to get a State Innovation Waiver under the Affordable Care Act.

Departments of Health and Human Services Secretary Kathleen Sebelius said the new guidelines “demonstrate the flexibility available to states as they continue to move forward on fixing our broken health insurance marketplace.”

Under ACA, State Innovation Waivers are available in 2017. However, the Obama administration said it supports legislation that would make waivers available to states beginning in 2014, so long as they:

• Provide coverage that is as comprehensive as the coverage offered through Health Insurance Exchanges.
• Make coverage as affordable as it would have been through the exchanges.
• Provide coverage to as many residents as otherwise would have been covered under ACA.
• Do not increase the federal deficit.

The enhanced flexibility for waivers comes as Republicans in Congress ramp up attacks on the more than 1,000 waivers issued under the ACA. The Hill newspaper reported Friday that the waivers have become a political liability for the Obama administration. Approval of waiver requests has jumped from 222 to almost 730 in December, and another 300 have been approved since then. The Department of Health and Human Services says waiver requests have slowed during the past two months, but that hasn't quelled the GOP outcry.

The Obama administration has said that states have significant flexibility in implementing ACA , from how they design exchanges to cracking down on insurance company abuses. States also have new resources to improve and lower costs in their Medicaid programs.  For example, if states choose to operate their own exchange, they are eligible for grants to help design them and determine the rules, including whether to allow all companies to offer insurance in the exchange or to select only plans that improve the quality and affordability of the choices.

States could also provide tax credits that link small business tax credits to the tax credits for moderate-income families. Or they could change the benefit levels or add new benefit levels for health plans offered in the exchanges, HHS said in a media release. 

The proposed regulation describes the content of the waiver application and how such proposals may be disclosed to the public, monitored, and evaluated. The Obama administration said it wants suggestions for improving this process from states, patients, providers, and the public.