The Centers for Medicare and Medicaid Services (CMS) has released new information to help states seek waivers from requirements in the Affordable Care Act (ACA). The new tool is intended to help states complete waiver applications that allow them to establish high-risk pools/ state-operated reinsurance programs. Section 1332 waivers generally can be used by states to opt out of some mandated provisions under the ACA.
CMS is helping to provide guidance to states that want to pursue solutions to help lower costs and increase coverage choices for Americans struggling with unaffordable premiums and reduced competition in the insurance market, brought on by the ACA. Individuals obtaining coverage in the ACA marketplace have faced double-digit premium increases and insurance issuer exits.
Nationally, premiums on Healthcare.gov have increased by an average of 25 percent for 2017. The state of Arizona saw insurance costs go up more than 100 percent and one third of counties in the U.S. currently only have one insurer participating in the exchange. Two insurance carriers in Iowa recently announced they were exiting the market, leaving Iowans in jeopardy of having no insurers participating in the exchange in 2018.
“Today’s guidance addresses the ACA’s impact in driving up insurance costs and reducing choices,” said CMS Administrator Seema Verma. “State initiated waivers that implement high-risk pool/ state-operated reinsurance programs will help lower premiums, stabilize the health insurance exchange, and meet the unique needs of each state.”
States have unique sets of challenges within the health insurance exchange and in the broader individual health insurance market. In Alaska, for example, initial rate information showed the state could face a potential 40 percent increase in premiums in the 2017 plan year. In an effort to stabilize premiums, the state introduced a reinsurance program to offset the projected increase. The move helped to steady premiums, and Alaska is now requesting a 1332 State Innovation Waiver in order to continue the program for future plan years. If approved, the state could receive federal funding to offset a portion of the costs. Federal law requires the 1332 reinsurance program to be budget neutral, so it will not increase costs for taxpayers.