|State Spotlight: CMS Releases Four Concepts for Waivers, Including Reinsurance Programs|
On Thursday, CMS released four new waiver concepts designed to provide examples of how states can take advantage of flexibility offered in the recent guidance on Section 1332, State Relief and Empowerment Waivers. That guidance was released in October and alters the way CMS evaluates and approves Section 1332 waiver applications under the ACA.|
The four new waiver concepts include account-based subsidies, state-specific premium assistance, adjusted plan options, and risk stabilization strategies. States are not limited to these four options and proposals based on one of these concepts will not automatically be approved, as all waiver applications must meet Section 1332’s statutory guidelines.
The first concept on account-based subsidies would allow states to direct ACA subsidies (pass-through funding for premium tax credits and small business tax credits) into “defined contribution, consumer-directed” accounts to pay for health insurance premiums and out-of-pocket health expenses. Under this approach, subsidies could also be combined with contributions from employers and individuals. In a press release, CMS highlights this account-based subsidy concept as having the “best potential to address various structural problems with the ACA.” Additionally, CMS Administrator Seema Verma said that these accounts would be different from existing health accounts, such as HRAs, and would be subject to state regulation.
The next concept on state-specific premium assistance could allow states to distribute subsidies differently from the ACA by creating a new state-administered subsidy program. As a result, states could redesign their subsidy program to make tax credits available to those with incomes higher than 400 percent of the federal poverty level (FPL). Currently, the ACA provides premium tax credits to eligible individuals and families whose income ranges from 100 to 400 percent of the FPL.
Under the adjusted plan options concept, states could allow subsidies to be used towards the purchase of non-qualified health plans such as catastrophic plans. Additionally, states could use this option in conjunction with the account-based subsidy concept to provide subsidies in the form of contributions to accounts, allowing individuals to use the funds to purchase a wide array of coverage options outside of just ACA-compliant plans, such as short term or association health plans.
The last concept regarding risk stabilization strategies would provide states with more flexibility to implement reinsurance programs or high-risk pools. CMS notes that “reinsurance programs have lowered premiums for consumers, improved market stability, and increased consumer choice.” This concept falls in line with a majority of currently approved waivers. As of today, seven of the eight approved Section 1332 waivers focus on reinsurance programs. Moreover, this concept ties into an exclusive meeting NAHU had with CMS Administrator Verma and her staff earlier this month discussing continuing work in the remaining states to apply for and ultimately implement similar reinsurance programs. NAHU is eager to work with states seeking 1332 waivers to establish reinsurance programs, and will be assisting many state chapters as they begin the process of working with their state legislatures to fulfill the application process to be approved to implement reinsurance programs within their borders.
| < Previous Article | Next Article >|