The Centers for Medicare and Medicaid Services wants to see more states take advantage of 1332 waivers to the Affordable Care Act, CMS Administrator Seema Verma told stakeholders Tuesday morning in Washington D.C.
The ACA includes Section 1332 to allow states to waive certain ACA regulations to implement new healthcare programs. Eight states have done so, but all but one waiver has been used for a reinsurance program to help pay for high risk claims.
"States can seek waivers of certain federal requirements as long as their proposal meets a set of four guardrails," Verma said
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One guardrail is protections for consumers who have pre-existing conditions. No waiver can undermine ACA protections for this coverage, she said, though a new type of high risk pool approach could provide better coverage for people with pre-existing conditions. Verma did not elaborate but said more information would be forthcoming.
"This would provide an opportunity to better tailor coverage for people with pre-existing conditions while lowering premiums for everyone else just the same as reinsurance," Verma said. "We believe reinsurance waivers barely touch the surface of what may be possible."
Through the risk stabilization waiver concept, seven states have implemented reinsurance programs. Reinsurance lowers the premiums for everyone in the market, such as the 8 percent experienced in Oregon and 30 percent in Maryland.
States may be allowed to use subsidies for coverage for short-term plans, but they must have a solution for how to continue to guarantee access to the same level of affordability and comprehensiveness for people who remain in the individual market.
Verma also suggested that states use a seamless structure for health insurance for both consumers using subsidies and those who have coverage through Medicaid.
CMS has been working to stabilize the individual market to bring down cost and premium rates and to increase competition.
A study found that exchange premiums were 50 percent higher, on average, in areas with a monopolist insurer compared to those with more than two insurers, Verma said.
CMS has allowed insurers to silver load premium increases onto silver-level plans, which has helped to reduce other premiums. As most consumers get subsidies to cover premiums, rate increases have been borne by the federal government.
A recent CMS rule gives issuers a reduction in exchange user fees.
For 2019, there are 23 more issuers participating on Healthcare.gov than 2018. As a result, only five states have one issuer, compared to 10 states last year.
But the average monthly premium for a family of four on Healthcare.gov is still over $1,500, Verma said.
Other waivers, such as 1115, give states the ability to implement work requirements for Medicaid coverage.
ON THE RECORD
"As states consider possibilities under 1332, we want states to keep in mind how a 1332 waiver can be part of a more comprehensive healthcare program that provides a continuum of coverage from a Medicaid 1115 waiver to a 1332 waiver," Verma said. "A state does not have to have one coverage model for low-income adults on Medicaid and a completely different one for people with premium subsidies. Income fluctuates, and we want people to strive for financial independence. Recognizing this, a state could design one seamless structure that guarantees people have access to affordable health insurance in the private market while removing barriers to upward mobility."
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