May 8, 2019
By Naomi Lopez
Lawmakers in
the U.S. House of Representatives are set to vote tomorrow on a bill that would
severely limit the use of state innovation waivers under the Affordable Care Act
(ACA, commonly known as Obamacare) law. Section 1332 of the ACA allows states
to seek approval for more flexibility in using ACA subsidies to provide
healthcare coverage and services.
The law
under consideration, Protecting
Americans with Preexisting Conditions Act of 2019, basically says that: We
don’t think Trump administration guidance on using these waivers should be
allowed because it provides a different interpretation of what might be allowed
than what the Obama administration said.
Unfortunately,
the proposed law offers no parameters for evaluating what should be allowed and
why. Nor does it provide any suggestions for how a state should relieve the
climbing uninsured rates, reduce the ACA premiums (which have more than doubled
in many markets), or how to better ensure access to care for those with an
insurance card but with little access to care. Before lawmakers slam the door
on potential state-based, innovative solutions to providing better healthcare
access and affordability, there are three things they should know:
1. The ACA allows states to
innovate.
Section 1332
of the ACA allows states to seek flexibility or to be exempted from up to
eleven statutory requirements of the law. The Obama administration issued
guidance on these waivers in 2015. Unfortunately, the guidance was so strict
that it really didn’t leave much room for states to innovate. In October of
last year, the
Trump administration issued new guidance that provides more opportunities
for states to redirect ACA subsidies to offer a more robust set of options for
healthcare coverage and care.
2. 1332 waivers can increase
healthcare access and affordability. These waivers give states flexibility to
re-imagine healthcare in their borders.
Too often,
families face a welfare cliff where, when they take a new job or accept a pay
raise, they lose all Medicaid benefits. Imagine a state being able to temporarily
help to subsidize individuals moving from the Medicaid rolls to employer-based
coverage, providing a savings account for out-of-pocket expenses without having
to move onto the exchange—with a set of coverage benefits that more closely match their unique needs and preferences.
And imagine
a family whose breadwinner loses their job and their employer-sponsored
healthcare coverage. Rather than facing the prospect of being uninsured, the
family could obtain a subsidy to purchase a short-term insurance plan and pay
for routine care while in-between jobs. In this case, the family would not be
thrown into the ranks of the uninsured, and they would have some security in
knowing that they could obtain services when needed.
3. Based on the title of the
bill, one might mistakenly believe that the newer guidance strips away
protections for those with pre-existing conditions. It does not.
While it
might score political points to repeat the name of the bill, the reality is
that the ACA sets out clear requirements for protecting those with pre-existing
conditions, and those protections are not waivable under a 1332 waiver. The new
1332 guidance allows states to pursue new approaches to delivering higher value
and more affordable coverage, and it does so within the confines of the ACA law
that requires pre-existing conditions protections.
There is no silver bullet for the challenges facing the
American healthcare system, but slamming the door shut on state innovation is
not the answer. States understand the complexities of their own unique
populations’ needs. Attempts to enshrine top-down, one-size-fits-all rules and
edicts are not only out of synch with the rapidly changing innovations in
healthcare models and designs, they ignore the realities of how the ACA
continues to fall short for so many Americans.
Naomi Lopez is the director of healthcare policy at the Goldwater Institute.
