March 13, 2017
Offering states flexibility to increase market stability and affordable choices
Today, the Department of Health and Human Services (HHS), in partnership with the Department of the Treasury, suggested ways to help foster healthcare innovation by giving states greater flexibility.
“States need the flexibility to develop innovative healthcare models that will improve patient access to care, increase affordability and choices offered, lower premiums, and improve market stability,” said Health and Human Services Secretary Tom Price, M.D. “Today’s letter highlights State Innovation Waivers as opportunities for states to modify existing laws or create something entirely new to meet the unique needs of their communities.”
Section 1332 of the Affordable Care Act (ACA) permits a state to apply for a State Innovation Waiver to pursue innovative strategies for providing its residents with access to high quality, affordable health insurance. The Departments are promoting these waivers to give states the opportunity to develop strategies that best suit their individual needs. Through innovative thinking, tailored to specific state circumstances, states can lower premiums for consumers, improve market stability, and increase consumer choice.
For example, Alaska has made significant improvements to its individual health insurance market by implementing a state-operated reinsurance program. Initial rate information in Alaska indicated that premiums would increase over 40 percent for the 2017 plan year. To mitigate this anticipated increase, the state created a reinsurance program prior to Open Enrollment for plan year 2017 to significantly offset the projected increase, helping to stabilize premiums. Based on this success, Alaska is now requesting a Section 1332 State Innovation Waiver, which is currently under review by the Departments, to permit it to receive funding based on the savings to the government related to lower premium tax credits and continue this program for future plan years. If a state’s plan under its waiver proposal is approved, a state may be able to receive pass-through funding to help offset a portion of the costs for the high-risk pool/state-operated reinsurance and other premium stabilization programs while also lowering costs for consumers. The Departments welcome the opportunity to work with states on Section 1332 State Innovation Waivers, and in particular, invite states to pursue approval of waiver proposals that include high-risk pool/state-operated reinsurance programs.
To find further information regarding section 1332 State Innovation Waivers visit: https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Section_1332_State_Innovation_Waivers-.html.
To find a copy of the letter, visit: https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/March-13-2017-letter_508.pdf