On June 22, Senate Republicans released their much-awaited health reform bill, the Better Care Reconciliation Act of 2017 (BCRA). Much attention has rightfully focused on the bill’s myriad changes to the Medicaid program and to subsidies for the purchase of private insurance. But the legislation also makes potentially highly impactful changes to state innovation waivers, which are included in section 1332 of the Affordable Care Act (ACA).

Under current law, section 1332 provides broad flexibility for states to waive key ACA provisions so long as health coverage is not jeopardized and federal deficits not increased. Waivers can affect a wide range of provisions, including the premium tax credit, the definition of essential health benefits, the requirement that insurance plans cap annual out-of-pocket spending, and the requirement for states to operate a Marketplace, among others.

The changes in the Senate bill would upset this structure, removing the coverage-related guardrails and thereby opening the door for states to pursue waivers that would result in substantial losses in health coverage and affordability. The weakened guardrails would also allow states significant latitude to misuse federal health care dollars.