Wednesday, August 30, 2017

"Just a little procedural easing" those ACA innovation waiver guardrails!

The Senate HELP Committee's efforts to pass an ACA stabilization bill are likely to hinge on the ACA's Section 1332 innovation waivers, according to Axios' David Nather:
How they'll give states more flexibility: They want to beef up the ACA's "Section 1332" waivers, but Democrats don't want to do anything that undermines the "guardrails" in those waivers — They can't reduce the number of people with health coverage, make insurance less comprehensive or affordable, or increase the deficit.
  • Instead, they'll just try to ease the procedural rules, according to a Senate Democratic aide. The question is whether that will be enough for Republicans.
Just a little procedural easing, ladies and gentlemen! Recall, though, that the BCRA nominally left the ACA guardrails in place -- but effectively gave states carte blanche to knock them down "procedurally." Tim Jost explained back in June (my emphasis):

Perhaps the most important private insurance market provision of the Senate bill comes near the end: its amendments to the 1332 state innovation waiver program. The ACA permitted states to seek waivers from certain requirements of the ACA beginning in 2017. Under these waivers, states could adopt alternative approaches that would offer insurance coverage at least as comprehensive as that provided under the ACA (as certified by the CMS Actuary), offer coverage and cost-sharing protections at least as affordable, cover at least a comparable number of residents, and be budget neutral.

The provisions of the ACA subject to 1332 waivers (and not otherwise repealed by the Senate bill) include the essential health benefits, actuarial value, out-of-pocket limits (for individual plans), and other qualified health plan requirements, as well as the ACA’s exchange provisions (which are not otherwise repealed by the Senate bill) and its premium tax credit provisions. Under the Senate bill, these can be waived if a state describes how it would ”provide for alternative means of, and requirements for, increasing access to comprehensive coverage, reducing average premiums, and increasing enrollment.”

This is a much lower standard than the ACA’s. It ignores both how comprehensive the coverage must be and how high cost-sharing may be under a waiver. The Senate bill also substitutes for the ACA’s budget neutrality requirement a requirement that the waiver not increase the federal deficit...

The bill would require HHS to establish an expedited process for considering waivers in urgent or emergency situations involving access to health insurance coverage. It would also provide that HHS “shall” rather than “may: approve waivers. States would not have to enact legislation to seek waivers, which could rather be submitted based on a certification by the governor or insurance commissioner. Waivers would last for eight years rather than five (as under the ACA) and could be renewed for another eight-year period at the application of the state. The 1332 amendments would be applicable immediately upon enactment and retroactively apply to waivers requested before the date of the statute.

Unlike the House’s AHCA waivers under the MacArthur amendment, the Senate bill does not permit waivers of the ACA’s prohibition on health status underwriting. It would, however, allow comprehensive waivers of essential health benefits, out-of-pocket limits, and actuarial value requirements that would have much the same effect. Individuals with preexisting conditions would be able to get coverage, but they could be denied coverage for the pharmaceuticals or services that they would need for treatment of their preexisting conditions. Waivers of EHB could also affect large employer plans, which are only prohibited from imposing annual and lifetime limits on EHB and only required to cap out-of-pocket expenditures for EHB.
Assuming Democrats will not entirely give away the store in this manner, how might Sect. 1332  waivers be eased -- "procedurally"? Speed up the timeline? Cut out the CMS Actuary, who, under the ACA, must certify that the guardrails have not been violated? (That would be in keeping with the Republican war on fact-based government, evidenced in their efforts to delegitimize the Congressional Budget Office.)  Specify that 1332 waivers can be combined with Medicaid Sect. 1115 waivers, so that savings in one might offset more spending in the other?

That last is a favorite progressive fallback position, countenanced by Jost and proposed (with CHIP waivers also thrown into the mix) by the bipartisan Convergence Center for Policy Resolution, which includes Families USA's Ron Pollack.  In fact the ACA does not forbid combining waivers: HHS guidance issued in 2016 did so. But Republicans are unlikely to regard this as much of a giveaway. The Price HHS could change this rule administratively. For that matter, HHS may effectively ignore the Section 1332 guardrails as they now stand. We'll find out when they rule on Iowa's waiver proposal.

"State flexibility" sounds anodyne, and a move to "ease the procedural rules" sounds even more so. But the AHCA and BCRA end-runs around core ACA individual market protections taught us that they're anything but.

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