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Old and busted: 1115 waivers. New hotness: 1332 waivers. (Sorry, Medicaid fans. As a reminder, 1115 waivers are what states could use to change their Medicaid programs, introduce work requirements, etc.)
Now you're going to want to get up to speed on Obamacare's 1332 waivers. Alongside their Medicaid brethren, they're where some of the big health policymaking could happen now that Obamacare repeal appears dead.
The Affordable Care Act created the waiver program to give states an opportunity to pursue their own health care programs as alternatives to the health care law. States had wide latitude in the specifics of their programs, but they have to meet some strict requirements: Namely, their plans can't increase the number of uninsured people, can't reduce benefits, and can't increase costs for customers or the government.
The best-known 1332 waiver was in the works in Vermont, which sought to create a universal single-player plan but eventually dropped it when the state decided the finances wouldn't work.
That showed us one possible end of the spectrum. But now, under the Trump administration, Republican-led states are starting to give us a better idea of how they could use waivers to make Obamacare more conservative.
The Wall Street Journal and Washington Examiner have good summaries of Iowa's new proposal. It might be the most ambitious to be submitted to the feds so far; other states have largely limited their proposals to reinsurance, which would help insurers recoup their costs to stabilize the insurance market.
Iowa has bigger ideas. The state wants to:
- Standardize the benefits for plans on the marketplace, eliminating the tiered bronze, silver, gold, and platinum options under Obamacare
- Transition from the existing subsidies, which limit your premiums to a percentage of your income, to a flat dollar amount based on income and age
- Eliminate cost-sharing reductions, the law's payments to health insurers that compensate them for reducing out-of-pocket costs for their lower-income customers
- Create a reinsurance program for insurers of high-cost enrollees, in part using money saved from the CSRs
Some of the changes — particularly reinsurance — could have stabilizing effects, Larry Levitt at the Kaiser Family Foundation told me. Others, such as the changes to the subsidies, would not necessarily change the dynamics of the market but would still have a significant impact on the people buying coverage.
"Fixed-dollar subsidies shift the risk of higher premiums, and the benefit of lower premiums, to consumers," he said. "Iowa’s estimates of how consumers would be affected are very sensitive to what happens to premiums."
This is also where the new administration comes in. Obamacare does create these guardrails to prevent states from gutting benefits and/or coverage under the waivers, but there is some administrative leeway in how to interpret the proposals.
The Trump administration is going to be looking for ways to give states what they want.
Trump officials "can interpret 1332 waiver authority in ways that differ from the Obama administration," KFF's analysts wrote earlier this summer. They added of another proposal: "A looser interpretation of these guardrails may permit approval of some of these changes."
That was in reference to Oklahoma's emerging waiver. If Iowa is turning up the volume on 1332s, Oklahoma wants to take it to 11.
The proposal hasn't been finalized or submitted yet; in the interim, Oklahoma has submitted a narrower plan focused on reinsurance. But these are some of the bigger possibilities that a state task force laid out earlier this year:
- Change subsidy eligibility from 100-400 percent of the federal poverty level to 0-300 percent, while standardizing subsidies based on age and income
- Create two benefit options: a standard plan that covers 80 percent of medical costs, and a high-deductible plan that covers much less but can be used along with a health savings account
- Scale back the "essential health benefits" that plans are required to cover under Obamacare
- Allow insurers to charge older enrollees five times as much as younger enrollees, up from three times under Obamacare
- Explore using either high-risk pools or reinsurance, or a hybrid thereof, to cover high-cost patients
That's just the start. You should read the proposal, still under development, in its entirety to get a better sense of where the state wants to go.
There are still a lot of details to fill in, which makes it difficult to fully evaluate the plan and whether it would even work under the Obamacare restrictions. But it gives us a sense of how ambitious states could be now that Congress has move on from health care.
Chart of the Day
Opioids and Medicaid expansion. Some Obamacare critics have alleged this year that expanding Medicaid worsened the opioid crisis. Emma Sandoe and Andrew Goodman-Bacon looked at the numbers for Health Affairs.
With research help from Caitlin Davis
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