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By Sara Hansard
Dec. 11 — New guidance on how states can waive provisions of the Affordable Care Act if they cover at least as many residents comprehensively and affordably without increasing the federal deficit was released Dec. 11 by the departments of Treasury and Health and Human Services.
Under the guidance for the waivers under Section 1332 of the ACA, “The impact on all state residents is considered, regardless of the type of coverage they would have absent the waiver,” the agencies said. Waivers also would not be allowed to reduce coverage to “vulnerable residents,” including low-income people, the elderly and those with serious health issues, the guidance (CMS-9936-N) said.
The waivers, which can be approved for up to five years with renewals, could start in 2017. The guidance will be published Dec. 16 in the Federal Register. Comments on the guidance can be submitted at any time.
State innovation waivers “allow states to receive federal funding to implement alternative models of health care coverage that provide high quality, affordable coverage to their residents,” a fact sheet said.
To meet the affordability requirement, health-care coverage under the waiver must be forecast to be as affordable overall for state residents as coverage absent the waiver, and may generally be measured by comparing net out-of-pocket spending to income, the fact sheet said.
A waiver must not decrease the number of people with coverage that satisfies the requirements of the essential health benefits under the ACA, Medicaid or Children's Health Insurance Program standards, the fact sheet said.
The estimated effect on federal revenue includes all changes in income, payroll or excise tax revenue as well as other forms of revenue, including user fees, that would result from the proposed waiver, the fact sheet said. The effect on federal spending includes all changes in health insurance marketplace financial assistance and other spending, such as changes in Medicaid, as well as all administrative costs to the federal government, it said.
“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,” Senate Finance Committee ranking member Ron Wyden (D-Ore.) said in a statement Dec. 11.
Wyden authored the provision of the health-care law, and sent a letter Nov. 18 to HHS Secretary Sylvia Mathews Burwell requesting further information about the agency's preparations for when the waivers become available in 2017 (226 HCDR, 11/24/15).
“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 health care to millions of Americans who previously did not have access,” Wyden said in the statement.
Timothy Jost, professor emeritus at Washington and Lee University School of Law in Lexington, Va., and a consumer liaison to the National Association of Insurance Commissioners, told Bloomberg BNA Dec. 11, “What the guidance says is that we're going to look at this real closely. You can't make things worse for the people who were intended to be helped by the Affordable Care Act.”
Under the guidance, “You can't just give tax credits to middle-income people and young people and say we've covered just as many people even though now low-income people lose coverage,” Jost said.
The guidance also says that if states propose setting up alternative premium tax programs through their marketplaces, they “won't be able to do that through the federal marketplace,” Jost said. In addition, the Internal Revenue Service wouldn't run alternative premium tax credit programs, he said. “I think that further limits what states can do,” he said.
Jost said he found it “disappointing that they're doing this through guidance rather than a rule. If we elect an administration with a different attitude toward the ACA it's harder to change rules than to change guidance.”
The policies set out in the guidance follow a 2012 final rule from the HHS and Treasury on Section 1332 (35 HCDR, 2/23/12).
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