S ection 1332 of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended) allows states to apply for waivers of specified provisions of the ACA. Under a state innovation waiver, a state is expected to implement a plan (in place of the waived provisions) that meets certain minimum requirements. The Centers for Medicare & Medicaid Services' (CMS's) initial interpretation of these requirements was published in guidance released in 2015 but has since been superseded, as with other aspects of the waiver process, in updated guidance released by the agency on October 24, 2018. Under current guidance, the state's plan must provide health insurance coverage to as many state residents as would be covered absent the waiver and must make available to a comparable number of residents coverage that is both as affordable and as comprehensive as it would be absent the waiver. However, applications do not need to demonstrate that the affordable and comprehensive health insurance coverage will be purchased by a comparable number of state residents. Additionally, the state's plan cannot increase the federal deficit. A state may apply to waive any or all of the ACA provisions listed below for plan years beginning on or after January 1, 2017. In general, the provisions in Part I relate to the establishment of qualified health plans (QHPs). The Secretary of the Department of Health and Human Services (HHS) is to review and grant waiver requests for provisions not included in the IRC; the Secretary of the Treasury is to review and grant requests to waive provisions in the IRC (the availability of premium tax credits and the application of the employer and individual mandates). The materials include, but are not limited to, information about the enacted state legislation allowing the state to carry out the actions under the waiver, a description of the plan or program the state expects to implement in place of the waived provisions, and analyses showing that the state's plan or program meets the requirements for granting a waiver. How Long Can a State Innovation Waiver Be in Effect? How Many States Have Applied for State Innovation Waivers? As of the date of this report, 14 states have submitted applications for state innovation waivers—Alaska, California, Hawaii, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Jersey, Ohio, Oklahoma, Oregon, Vermont, and Wisconsin. All of these waivers were considered and approved under the initial state innovation waiver guidance, and all but one of the approved waivers implement a variant of a statewide individual market reinsurance program. Massachusetts, Ohio, and Vermont received notification from HHS and the Treasury that their applications were incomplete, and it does not appear that any of these states has modified its application in response to the notification. If one of these three states does take action, any further review of its waiver application would be under the updated state innovation waiver guidance. California, Iowa, and Oklahoma have withdrawn their applications.
Section 1332 of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) provides states with the option to waive specified requirements of the ACA. In the absence of these requirements, a state is to implement its own plan to provide health insurance coverage to state residents that meets the ACA's terms.
Under a state innovation waiver, a state can apply to waive ACA requirements related to qualified health plans, health insurance exchanges, premium tax credits, cost-sharing subsidies, the individual mandate, and the employer mandate. The state can apply to waive any or all of these requirements, in part or in their entirety.
To obtain approval for a waiver application, a state must show that the plan it will implement in the absence of the waived provision(s) meets certain requirements. Under current guidance, the state's plan must provide coverage to as many state residents as would be covered absent the waiver and must make available to a comparable number of residents coverage that is both as affordable and as comprehensive as would be absent the waiver. However, applications do not need to demonstrate that the affordable and comprehensive coverage will be purchased by a comparable number of state residents. Additionally, the state's plan cannot increase the federal deficit.
The Secretary of the Department of Health and Human Services (HHS) and the Secretary of the Treasury share responsibility for reviewing state innovation waiver applications and deciding whether to approve applications. The earliest a state innovation waiver could have gone into effect was January 1, 2017.
In October 2018, the Centers for Medicare & Medicaid Services (CMS) released updated guidance regarding the state innovation waiver process that superseded previously issued CMS guidance from December 2015. In general, the updated guidance attempts to make it easier for a state plan to be approved. The updated guidance applies to all waiver applications that had not been approved prior to the date of the guidance's release. Waivers approved under the previously issued guidance did not require reconsideration.
As of the date of this report, eight states—Alaska, Hawaii, Maine, Maryland, Minnesota, New Jersey, Oregon, and Wisconsin—have approved state innovation waivers. All of these waivers were considered and approved under the initial state innovation waiver guidance, and all but one of the approved waivers implement a variant of a statewide individual market reinsurance program.
Massachusetts, Ohio, and Vermont have submitted applications and received notification that their applications were incomplete. It does not appear that any of these states has modified its application in response to the notification (as of the date of this report). If these states take action, any further review of their waiver application would be under the updated state innovation waiver guidance. Three states—California, Iowa, and Oklahoma—submitted waiver applications and have since withdrawn their applications.