Repeal push complicates state efforts to get ObamaCare waivers

Repeal push complicates state efforts to get ObamaCare waivers
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This story previously appeared in The Hill Extra. 

A number of states are readying blueprints for substantial changes under an ObamaCare waiver program, but a renewed push to repeal the law is complicating their plans.

The Affordable Care Act’s 1332 State Innovation Waiver lets states skip some of the law’s regulations if their healthcare plan covers a comparable number of people without increasing the federal deficit. States can apply for the waivers starting this year.


But a revived attempt to repeal the health law is throwing a wrench in those plans, since states don’t know what a new bill will entail. While House Republicans moved forward an amendment in committee to their larger repeal bill on Thursday, the party is far from reaching a consensus.

“The way we are tackling those great uncertainties is that we have to continue to move forward with plans to make the market more stable and proceed along a path that works within the current regulatory framework,” said Buffy Heater, the strategy officer for Oklahoma's Health and Human Services cabinet. “Now we have to of course be mindful of any other proposals that may come up, or any movements that may be made at that time, and be flexible and adapt to whatever changes those might bring.”

Oklahoma is preparing to file a plan with the Centers for Medicare and Medicaid Services later this summer that would implement sweeping changes to the state’s individual insurance market.

If approved, the waiver would establish what Duke University health policy researcher David Anderson calls a “backdoor Medicaid expansion” by shifting subsidies from people between 100 percent to 400 percent of the federal poverty level to those between 0 percent to 300 percent.

The waiver would also allow insurers to charge older members more, restructure subsidies based on age and income, eliminate tiers in favor of two broader categories and require insurers to establish a minimum amount of value-based agreements. Officials also want to regulate outcomes in a number of areas, including mental health, diabetes and obesity.


The stakes are high. Blue Cross Blue Shield of Oklahoma is the only carrier left on the state exchanges, and the state suffers from low enrollment rates. Heater said CMS has promised the state an expedited waiver review but no assurances that things won’t change.

“I certainly haven’t asked for that assurance and I don’t know that they could actually ever give that to us,” she said.

A spokesperson for the Department of Health and Human Services said the agency “can’t speculate or confirm what may or may not be in a legislative proposal that hasn’t been made public.”

But HHS Secretary Tom Price encouraged states to make use of the waivers in a letter to governors last month, highlighting Alaska’s application to establish a state-run reinsurance pool to subsidize the high costs of sick enrollees. That waiver is close to being approved.

Alaska Insurance Director Lori Wing-Heier told The Hill Extra that the waivers were protected under the previous GOP bill. But language for a new bill has not been drafted and could be radically different than the original proposal.


A spokesperson for one of the key congressional health committees told The Hill Extra that “nothing should impact” Alaska’s waiver, but did not say whether other state waivers would be affected.

Minnesota is also preparing an application similar to Alaska’s, and plans to submit it soon. Gov. Mark Dayton (D) allowed a state bill authorizing the plan to become law without his signature, after insurance companies failed to promise him they would pass on cost savings to consumers.

Hawaii is the only state to obtain a waiver so far. The waiver exempts Hawaii from establishing one of ObamaCare's SHOP [Small Business Health Options Program] exchanges and other small business provisions because the state had a subsidized small employer market before the ACA.

Two other states — California and Vermont — have also submitted waiver applications, but neither are moving forward. California’s waiver would have provided undocumented immigrants with unsubsidized coverage, while Vermont’s would have exempted the state from establishing a SHOP exchange so employers could continue purchasing coverage directly through health plan websites.

Proceeding under current law might be the best course of action for states looking to make changes, since the conversation in Washington remains fluid. The White House on Wednesday tamped down expectations for a quick new repeal bill after a Tuesday meeting between Vice President Mike PenceMichael (Mike) Richard PenceSunday shows preview: Lawmakers gear up for Senate impeachment trial Is Mike Pence preparing to resign, assume the presidency, or both? Pence to visit Iowa days before caucuses MORE and divided House Republicans failed to produce a consensus. 

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