States must hold Trump to his word on working with them to solve ObamaCare

States must hold Trump to his word on working with them to solve ObamaCare
© Hill Photo Illustration/Garrett Evans

On the very day he was inaugurated, President Trump issued his first executive order directing all federal agencies to cooperate with and “provide greater flexibility to states” as they looked for ways to stop the premium pains of ObamaCare. So far, 500 days later, that order has yet to be followed.

Sure, Secretary of Health and Human Services, Tom Price and the administrator of the Centers for Medicare and Medicaid Services, Seema Verma promptly called for innovative solutions and promised to work with states to numb the pain that ObamaCare continues to inflict on health-care markets.


But actions always speak louder than words and, thus far at least, federal action has denied or delayed most of the state innovation waivers requested under Section 1332 of the Affordable Care Act.


Most recently, for example, HHS denied Ohio’s waiver request to exempt Ohioans from ObamaCare’s individual mandate to buy health insurance. Ohio acknowledged that the penalty for violating the mandate will be $0 in 2019, but it rightly worries that so long as the mandate remains the law the tax penalty could be reinstated. Ohio’s application followed the HHS blueprint for innovation waivers, but HHS denied the state’s request because it did not “describe the reason for the waiver request.”

This most recent denial should concern every state for two reasons. First, because Ohio did in fact give its reason for the waiver, stating several times that it was needed because the individual mandate remained federal law even though new legislation had “zeroed out” the penalty. Perhaps the agency did not find Ohio’s straightforward explanation “descriptive” enough.

And second, because HHS took 45 days to deny Ohio’s request on what amounts to a technicality after HHS failed to tell applicants that descriptive explanations must be submitted in precise ways in particular boxes on federal forms. Those 45 days for a pro-forma rejection letter are symptomatic of an agency that routinely takes the entire 225-day approval period to deny state applications.   

Both concerns signal that despite the President’s directive, his administration is not ready to cooperate and work with the states to find innovative solutions to a problem that the states didn’t create. And both signal more of the same technocratic, bureaucratic thinking that we have come to expect from Washington — and that’s a shame.   

Fortunately, there is still time for the Trump administration to learn from nascent mistakes and for the states to hold the president to his word on working with them to solve the riddle of ObamaCare.

Right now, states are reluctant to pitch their innovative reform ideas to Washington given how Washington has treated them. But assuming that HHS and the Treasury Department actually want to empower the states and will entertain the bold ideas, the administration can still take several steps in the right direction starting with rescinding or substantially revising the Obama-era guidance on Section 1332 waivers.

The Obama administration’s crabbed view of federal-state cooperation produced guidance that discourages states from pursuing meaningful reform under Section 1332. Rewriting that guidance with a more expansive view is long overdue. The Trump administration’s revised guidance should add flexibility to HHS’s interpretation of Section 1332.

It should actually follow the plain text of the Affordable Care Act that specifically allows states to combine Medicaid and innovation waivers so that they can find more effective ways for citizens to get better health care coverage as they leave Medicaid. Short of this, Trump’s HHS can and should at least layout more detailed model innovation waivers, similar to the model reinsurance waiver it provided, for states to follow.

Just hours after taking the oath of office, President TrumpDonald John TrumpThis week: House kicks off public phase of impeachment inquiry Impeachment week: Trump probe hits crucial point Judd Gregg: The big, big and bigger problem MORE wrote a new prescription for state and federal officials to follow in the fight for health care reform. Unfortunately, more than a year later, that prescription remains unfilled by the President’s own team, denying the country at least one source of medicine that it desperately needs.  

Rea S. Hederman Jr. is executive director of the Economic Research Center at The Buckeye Institute and vice president of policy. He is the co-author of Returning Health Care Power to the States and Federal Efforts to Stabilize ACA Individual Markets through State Innovation.