Proposed Rule Allows States Waivers From PPACA Provisions

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States would be allowed to come up with their own plans for implementing major provisions of the health care overhaul law--including provisions dealing with employer requirements--under a proposed rule issued March 14 by the departments of Health and Human Services and Treasury.

To receive “innovation waivers,” states seeking alternatives to federal regulations for implementing the health insurance coverage requirements of the Patient Protection and Affordable Care Act for plan years beginning on or after Jan. 1, 2017, would have to show that they could provide coverage as comprehensively and as affordably as required under PPACA, Steve Larsen, director of the Center for Consumer Information and Insurance Oversight, said in a telephone news briefing. CCIIO is part of the Centers for Medicare & Medicaid Services, which is part of HHS.

In addition, states would have to show that their plans would cover a comparable number of residents and would not increase the federal deficit, Larsen said. States could receive the waivers for five years with an option for renewal. States would also have to submit quarterly and annual reports showing they were meeting the goals of their plans.

The 84-page proposed rule lays out steps states would need to take to receive waivers under Section 1332 of PPACA beginning in 2017 related to health insurance exchanges, tax credits, individual mandates, and employer responsibility provisions. On Feb. 28, President Obama announced his support for bipartisan legislation introduced in the Senate that would move the waiver date up to 2014, when the major provisions of PPACA are to take effect.

States Encouraged to Pursue Own Strategies

The proposed waiver process “enables states to pursue their own strategies to ensure that all of their residents have access to high-quality, affordable health care,” Chiquita Brooks-LaSure, director of coverage policy in HHS's Office of Health Reform, said at the news briefing. “States can use a variety of strategies to innovate through a waiver,” provided that they meet the requirements of comparable, affordable coverage that does not increase the federal deficit, she said.

Many states are considering legislation to set up health insurance exchanges, and states could enact legislation allowing for waiver submissions at the same time, Brooks-LaSure said. The proposed rule asks for comments on how far in advance states would need to apply for the waivers. Comments are due on the proposal May 13.

By Sara Hansard

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