Section 1332 State Innovation Waiver – Recent developments and the newly-released checklist
In follow-up to its letter to Governors regarding the Section 1332 Waiver opportunity, the Centers for Medicare and Medicaid Services (CMS) and the Department of Treasury released a Section 1332 checklist on May 16 designed to help states pursue ACA State Innovation Waivers. Section 1332 of the ACA allows states to waive specific ACA provisions as long as they apply according to the process set out in regulations and meet the following comparability requirements:
- The waiver will provide coverage to at least a comparable number of the state’s residents as would be provided without the waiver;
- The waiver will provide coverage and cost-sharing protections that are at least as affordable as would be provided without the waiver;
- The waiver will provide for coverage that is at least as comprehensive as would be provided without the waiver; and
- The waiver will not increase the federal deficit.
In distributing the checklist, the agencies reiterated their interest in working with states on waivers aimed at lowering premiums, improving market stability, and increasing consumer choice and, once again, highlighted the opportunity to use the waiver to implement high-risk pools and state-operated reinsurance programs. In the introduction to the checklist they specify that, if a state shows a reduction in federal premium tax credit spending resulting from initiatives such as state-operated reinsurance programs, the state could receive pass-through funding for the program from those savings. This is a request that Alaska and Minnesota have made in their pending Section 1332 Waiver requests.
The checklist outlines what information states must submit to satisfy the required elements of a Section 1332 Waiver application, including relative to:
- Public notice and comment requirements;
- State legislative authority;
- Waiver requests;
- Quantitative analyses;
- Implementation timeline; and
- Reporting requirements.
In several places, the checklist specifically notes the information that must be provided relative to a waiver request to support a reinsurance or high-risk pool program. Notably, in regards to such waivers, it flags the following:
- Authorizing legislation of such a program to be the subject of a Section 1332 waiver request must make the program contingent on the granting of the waiver; and
- The state must include a waiver request related to a request for pass-through funding to support such programs, such as a waiver to the single risk pool requirement.
On a related note, Minnesota became the most recent state to submit a Section 1332 Waiver application. Similar to Alaska’s waiver, Minnesota is seeking pass-through federal funding to support a new state reinsurance program, the Minnesota Premium Security Plan (MPSP). The federal funding would come from savings to federal premium tax credits and payments to the state’s Basic Health Plan as a result of the MPSP. Minnesota is also seeking to waive the single risk pool requirement in the individual market to allow insurers to factor in reinsurance payments received in calculating rates.
Click here to read PCG’s updated overview of all Section 1332 Waiver requests, opportunities, and actions, including a detailed table of specific states’ requests and other ideas being considered (now reflecting the newest waiver proposal submitted by Minnesota).