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December 11, 2015 12:00 AM

HHS guidance on state waivers sets strict rules preventing limited or expensive coverage

Virgil Dickson
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    HHS is working to ensure that the poor maintain coverage in states that end up seeking a 1332 waiver through new guidance posted Friday.

    According to a statute in the Affordable Care Act, beginning Jan. 1, 2017, states can request that the federal government waive basically every major coverage component of the ACA, including exchanges, benefit packages, and the individual and employer mandates.

    In the 19-page final guidance, HHS clearly states it would deny any proposals that would result in loss of coverage, especially to the most vulnerable populations such as low-income and elderly individuals, those with serious health issues or those susceptible to developing serious health issues.

    The language for the waivers was written by Sen. Ron Wyden (D-Ore.), who aimed to let states keep ACA funds while creating a more customized approach to coverage for their residents.

    “Today, HHS has taken an important step to support states that want to use State Innovation Waivers to tailor their health programs to best serve their constituents,” Wyden said in a statement after the guidance was released. “When I authored this provision, the intent was clear: allow states to innovate while still achieving the objectives of the Affordable Care Act—to bring high-quality, affordable healthcare to millions of Americans who previously did not have access.”

    Arkansas, California, Hawaii, Massachusetts, Minnesota, New Mexico and Rhode Island have already expressed some interest in seeking a 1332 waiver.

    HHS will approve a waiver if it finds that it would provide coverage to a comparable number of residents of the state as would be provided coverage absent the waiver, would provide coverage that is at least as comprehensive and affordable as would be provided absent the waiver, and would not increase the federal deficit.

    If the waiver is approved, the state may receive funding equal to the amount of forgone federal financial assistance that would have been provided to its residents pursuant to specified ACA programs, according to the guidance.

    To meet the affordability requirement, healthcare coverage under the waiver must be as affordable overall for state residents as coverage absent the waiver. The aim of this is to prevent excessive cost-sharing from being imposed on beneficiaries.

    A 1332 waiver can not decrease the amount of people receiving the 10 essential health benefits as outlined in the ACA, and it cannot reduce the amount of people in Medicaid or the Children's Health Insurance Program.

    HHS informed states relying on HealthCare.gov to enroll people into coverage that the federal platform cannot accommodate different rules for different states.

    For example, waivers that would require changes to the calculation of exchange financial assistance, for example, would not be feasible due to operational limitations, the waiver said.

    The guidance also appears to forbid a state from getting rid of the individual or employer mandate, noting that “certain changes that affect Internal Revenue Service administrative processes may make a waiver proposal not feasible to implement.”

    “At this time, the IRS is not generally able to administer different sets of rules in different states,” the guidance adds.

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