- Section 1332 of the Affordable Care Act allows states to apply for a waiver from many of the law's requirements to pursue innovative strategies for healthcare reform. HHS will publish the new guidance tomorrow in the Federal Register but the PDF of the document is currently available.
- Certain provisions of the ACA, such as prohibitions against pre-existing conditions or underwriting based on health status, must be upheld.
- States may apply to the HHS and the Treasury for waivers from various provisions of the ACA starting Jan. 1, 2017. Waiver proposals must be authorized by the state's legislature and developed through a public process and can be approved for up to five years.
Waiver proposals must have four key requirements: Provide coverage as comprehensive as that provided under the ACA, not increase the federal deficit, cover a number of residents comparable to that who would be covered under the ACA, and provide coverage and protection against excessive out-of-pocket expenses at least as affordable as that provided under the ACA.
The new guidance explains how HHS will evaluate waiver applications so the states are well informed when they consider a waiver application. It also explains the limited capacity of the federally-facilitated marketplace (FFM) and the IRS to administer state waiver programs, noting states that want to design their own premium subsidy program must do so on their own.
States will be required to submit a 10-year budget with the waiver proposals that assumes the waiver will continue permanently. The waiver cannot increase the federal deficit under the five-year maximum period of the waiver or over the 10 years covered by the budget.
According to Health Affairs, the guidance does not include the calculation of pass-through payments to the states, which it says "could be complicated considerably if the House of Representatives ultimately prevails on its claim in House v. Burwell that cost-sharing reduction payments must be appropriated annually, as it will be difficult to predict from year-to-year whether the funds will be appropriated and thus what the amount of the pass-through payments will be."
As noted previously, it's currently unclear whether states will take advantage of this opportunity.