Except for a few noteworthy successes, such as repealing the individual mandate that forced people to buy health insurance they did not want or could afford, and ridding us of the Independent Payment Advisory Board that turned Medicare over to unelected bureaucrats, Congress has remained almost at a standstill when it comes to fixing and reforming the healthcare insurance market, greatly damaged due to the regulatory morass caused by the Patient Protection and Affordable Care Act (ACA), or Obamacare.

Fortunately, the Trump administration is doing what it can by regulation and guidance to repair the harm done by ACA.  On Monday, the Centers for Medicare and Medicaid Services (CMS) and the U.S. Treasury Department, released new guidance on how CMS is planning to regulate Section 1332 State Innovation Waivers found in ACA.

Section 1332 permits states to apply for innovation waivers that enable them to make changes to Obamacare, but still provide access for their citizens to quality healthcare that is at least comprehensive and affordable as would be provided absent the waivers.  Both the Secretary of Health and Human Services and the Treasury Department work with a state on the review and approval process for such a waiver.  There are certain requirements a state must follow for CMS to accept its proposed waiver, such as an actuarial analysis and certification to support that its waiver will comply with the comprehensive, affordability, and scope of coverage requirements; a 10-year budget plan that is deficit neutral to the federal government; and a copy of the enacted state legislation providing the authority to implement its proposed waiver.

Several states have applied and received CMS approval to implement their innovation waivers.  Doug Badger, a visiting fellow, and Edmund Haislmaier, a senior research fellow, at the Heritage Foundation, discuss what several states have done to successfully change market conditions in their states to bring down health insurance premium costs, create more competition, and protect those individuals with pre-existing conditions in their September 27, 2018 report, “State Innovation: The Key to Affordable Health Care Coverage Choices.”

For example, Alaska moved customers with 33 medical conditions into a risk pool and their medical claims are funded by a portion of the federal-premium subsidies.  Non-federal funding comes from other areas, such as state assessments on insurers and general fund contributions.  The state's waiver enabled premiums in the state to go down by 19.8 percent and enrollment to increase by 7.1 percent in the non-group market.

Other states have not been so successful in designing and getting approval for a Sec. 1332 waiver.  Todays’ guidance will help more states create a successful waiver and help restore a vibrant, affordable individual health insurance market.

Be sure to read CMS Administrator Seema Verma’s excellent blog that explains what Obamacare did to non-group health insurance and how the Sec. 1332 waivers will restore a healthy, functioning market while still protecting those with pre-existing conditions.