States will have the ability to allow individuals to use ACA subsidies when buying short-term limited duration plans.
States are getting new flexibility in waivers to the Affordable Care Act, including being able to target ACA subsidies for individuals who want to buy short-term, limited duration plans, Centers for Medicare and Medicaid Services Administrator Seema Verma said today.
What is not flexible is protecting access to coverage to those with pre-existing conditions.
Verma gave no specifics on the types of waivers that will be considered, but said the agency was preparing to release a series of waiver concepts. More specifics are expected to be released in the coming weeks.
The policy goes into effect today but is expected to impact states next year, for the 2020 plan year.
IMPACT
The effect of the waivers will likely not be known until next year.
But the allowance of short-term insurance as an ACA alternative could have a more immediate effect as consumers choose plans during open enrollment starting November 1.
The Trump Administration this year extended the length of short-term plans from three months to one year, with an extension allowed for up to three years. Because these plans would not be obligated to cover the essential benefits mandated under the ACA, premiums are expected to be lower.
Opponents have said this would cause an exodus of healthy consumers from the traditional ACA market and rising prices for those left behind.
THE TREND
CMS has been taking credit for stabilizing the ACA market and lowering premiums through the use of waivers and by easing regulations.
For instance, reinsurance waivers have helped reduce premium costs, CMS said. To date, CMS has approved eight state waivers, and all but one have been a reinsurance waiver for states to develop high-risk pools to help pay the cost of high claims.
The reason for the lack of other approved waivers is due to the previous Administration limiting the types of state waiver proposals that the government would approve, CMS said.
The new Section 1332 waivers, called state relief and empowerment waivers, will allow states to “get out from under onerous rules of Obamacare,” Verma said.
WHAT ELSE YOU NEED TO KNOW
Under Section 1332 of the ACA, states can waive certain provisions of the law as long as the new state waiver plan meets specific criteria, or “guardrails,” that help guarantee people retain access to coverage that is at least as comprehensive and affordable as without the waiver; covers as many individuals; and is deficit neutral to the federal government.
The new waivers should aim to provide increased access to affordable private market coverage; encourage sustainable spending growth; foster state innovation; support and empower those in need; and promote consumer-driven healthcare, CMS said.
ON THE RECORD
“Now, states will have a clearer sense of how they can take the lead on making available more insurance options, within the bounds of the Affordable Care Act, that are fiscally sustainable, private sector-driven, and consumer-friendly,” said Health and Human Services Secretary Alex Azar.
“The Trump Administration inherited a health insurance market with skyrocketing premiums and dwindling choices,” said CMS Administrator Seema Verma. “Under the president’s leadership, the Administration recently announced average premiums will decline on the federal exchange for the first time and more insurers will return to offer increased choices.
“But our work isn’t done. Premiums are still much too high and choice is still too limited. This is a new day — this is a new approach to empower states to provide relief. States know much better than the federal government how their markets work. With today’s announcement, we are making sure that they have the ability to adopt innovative strategies to reduce costs for Americans, while providing higher quality options.”
HENRY KOTULA 