HHS guidance on ACA’s in­no­va­tion waivers im­pedes states’ flex­i­bil­ity

Modern Healthcare - - NEWS - By Vir­gil Dick­son

The Obama ad­min­is­tra­tion may have dis­ap­pointed states bank­ing on an Af­ford­able Care Act pro­vi­sion that would al­low them to duck many of the law’s fed­eral man­dates by find­ing home­grown ways to meet its cov­er­age goals.

Un­der Sec­tion 1332 of the ACA, states can ask to opt out of most of the law’s ma­jor in­sur­ance com­po­nents be­gin­ning in 2017, in­clud­ing the in­sur­ance ex­changes, min­i­mum ben­e­fit pack­ages and the in­di­vid­ual and em­ployer man­dates. But based on guidance HHS is­sued this month, it may be quite dif­fi­cult to get such a waiver.

“States were look­ing at 1332 as a magic car­pet, and with this guidance, what they got was a sub­way to­ken,” said Kather­ine Hemp­stead, di­rec­tor of health in­sur­ance re­search at the Robert Wood John­son Foun­da­tion.

The waiver author­ity’s in­clu­sion in the ACA was cham­pi­oned by Sen. Ron Wy­den (D-Ore.). Wy­den praised HHS for tak­ing steps to­ward re­al­iz­ing the so-called state in­no­va­tion waivers, which he said would “al­low states to in­no­vate, while still achiev­ing the ob­jec­tives of the Af­ford­able Care Act.”

But some stake­hold­ers and pol­icy ex­perts say HHS has in­cluded re­stric­tions in the guidance that will make it hard for states to take ad­van­tage of that promised flex­i­bil­ity.

“Un­for­tu­nately, the guidance speaks more to what can­not be done than what can be done,” said Deb­o­rah Bachrach, a part­ner at Manatt, Phelps & Phillips, and for­mer New York state Med­i­caid di­rec­tor.

States are most likely to be con­cerned about a sec­tion in HHS’ guidance that bars them from achiev­ing bud­get neu­tral­ity be­tween the new ACA waivers (un­der Sec­tion 1332 of the statute) and ex­ist­ing Med­i­caid waivers ( known as Sec­tion 1115 waivers). That is, they can’t bor­row sav­ings from one waiver to off­set ex­pen­di­tures un­der the other.

“Red states would prob­a­bly do some­thing along the lines of spend­ing more on Med­i­caid and less on the ex­change pop­u­la­tion to bal­ance that out,” said Yev­geniy Fey­man, a fel­low at the Man­hat­tan In­sti­tute, a con­ser­va­tive think tank. “But that’s ef­fec- tively im­pos­si­ble to do now.”

That con­cern was echoed by the Na­tional Gov­er­nors As­so­ci­a­tion, which sub­mit­ted a list of rec­om­men­da­tions to the Obama ad­min­is­tra­tion re­gard­ing the waiver. “The guidance is pretty far from the flex­i­bil­ity the gov­er­nors asked for,” said Fred­er­ick Isasi, di­rec­tor of the as­so­ci­a­tion’s health di­vi­sion. The nar­row in­ter­pre­ta­tion, Isasi said, will make it dif­fi­cult for gov­er­nors to “de­velop cov­er­age op­tions that meet their own needs.”

An­other stum­bling block will be that Health­Care.gov won’t ac­com­mo­date dif­fer­ent rules from dif­fer­ent states, HHS said in the guidance. A to­tal of 37 states and the Dis­trict of Columbia cur­rently rely on the fed­eral plat­form to en­roll their res­i­dents in cov­er­age.

But waivers that would re­quire changes in the cal­cu­la­tion of fi­nan­cial as­sis­tance for plans sold on the in­sur­ance ex­change would not be fea­si­ble, HHS said.

The waiver author­ity’s in­clu­sion in the ACA was cham­pi­oned by Sen. Ron Wy­den (D-Ore.). Wy­den, above, who praised HHS for tak­ing steps to­ward re­al­iz­ing the so-called state in­no­va­tion waivers, which he said would “al­low states to in­no­vate, while still achiev­ing the ob­jec­tives of the Af­ford­able Care Act.”

As a re­sult, states in the best po­si­tion to take ad­van­tage of the waiver author­ity may be the 13 that fully op­er­ate their own ex­changes, which would ex­clude nearly ev­ery Repub­li­can-led state. It is un­likely that any state would build its own ex­change now for the sake of seek­ing a 1332 waiver, said Ed Haislmaier, a health pol­icy re­searcher at the con­ser­va­tive Her­itage Foun­da­tion.

Haislmaier also noted that any state that does sub­mit a 1332 waiver re­quest for any­thing more than a mi­nor de­par­ture from the ACA could wait a long time for an an­swer, be­cause there’s no statu­tory win­dow for HHS to re­spond. “There is no ham­mer on the agency to do any­thing,” he said.

The guidance also ap­pears to for­bid states from elim­i­nat­ing the in­di­vid­ual and em­ployer man- dates be­cause the In­ter­nal Rev­enue Ser­vice wouldn’t be able to man­age dif­fer­ent rules for dif­fer­ent states.

Sev­eral states, in­clud­ing Repub­li­can-led Arkansas, Ohio, South Carolina and Texas, have ex­pressed in­ter­est in a waiver. A group of activists in Colorado, mean­while, have se­cured a spot on a 2016 ballot for a sin­gle-payer sys­tem, which could be im­ple­mented only un­der a 1332 waiver.

A spokesman for Arkansas Gov. Asa Hutchin­son said the gov­er­nor agrees the guidance is more re­stric­tive than ex­pected but re­mains in­ter­ested in seek­ing a waiver. Other states ei­ther didn’t re­spond to re­quests for com­ment or had not yet as­sessed the im­pact of HHS’ in­ter­pre­ta­tion.

A Wy­den spokesman said the se­na­tor doesn’t share the con­cerns ex­pressed in the wake of HHS’ guidance, which he said sim­ply clar­i­fies the statute.

“It’s im­por­tant that states are given as much flex­i­bil­ity as pos­si­ble,” Wy­den spokesman Tay­lor Har­vey said. “How­ever, the ACA set a bar for health­care qual­ity, af­ford­abil­ity and ac­ces­si­bil­ity. The State In­no­va­tion Waivers are meant to reach or ex­ceed that bar. Any­thing less than that would un­der­mine the pur­pose of the pro­vi­sion and the goals of the law.”

“States were look­ing at (Sec­tion) 1332 as a magic car­pet, and with this guidance, what they got was a sub­way to­ken.” KATHER­INE HEMP­STEAD Di­rec­tor of health in­sur­ance re­search at the Robert Wood John­son Foun­da­tion

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.