Affordable Care Act’s 1332 Waiver Examined by Policy Experts

Article ID: 688733

Released: 31-Jan-2018 11:05 AM EST

Source Newsroom: Rutgers School of Public Health

  • Michael K. Gusmano, PhD

Newswise — Dr. Michael Gusmano, professor at the Rutgers School of Public Health, and colleagues from the Rockefeller Institute of Government have examined the potential impacts of the Affordable Care Act’s (ACA) Section 1332 State Innovation Waivers. 1332 waivers are designed to give states flexibility in their approaches to achieving the goals of the legislation.

Several states have looked to 1332 waivers to shape how the ACA works in their state: Vermont planned to use such a waiver to further their efforts to adopt a single-payer system, while California hoped to encourage the enrollment of undocumented immigrants. However, only three states — Alaska, Minnesota, and Oregon — have received 1332 waivers under the current presidential administration. All have focused on reinsurance programs — programs that provide subsidies to absorb the costs of high-risk individuals and are designed to stabilize the ACA marketplace while preventing spikes in insurance premiums.

Not every state has submitted a 1332 waiver with an eye toward reinsurance, however: Iowa submitted such a waiver after the only insurance provider in its marketplace announced a rate increase of nearly 60 percent. Idaho is seeking to revamp both its healthcare marketplace and Medicaid exchange to extract high-cost individuals from the public marketplace. The breadth of the states’ approaches in planning for 1332 waivers suggests that the ACA must be a dynamic and flexible enough to adjust to different states’ healthcare, economic, demographic, and political circumstances.

The challenge lies in striking the right balance of dynamism and flexibility. Simply returning more power to the states could allow them to veer away from the purposes of the program — but while they cannot solve every ACA-related problem, 1332 innovation waivers have the potential to stabilize the insurance marketplace for the benefit of all the people it serves. Still, the implications are unclear: will waivers pave a way for states to change policy legally, and does policy appear coherent and cohesive as waiver usage increases? We do not have answers today, and these later developments will need to be studied carefully if we are to fully understand how the waiver process influences policy across the federal government.

For media and press inquiries, please contact Michelle Edelstein at (732)-235-5824 or mse46@sph.rutgers.edu


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