Last week, HHS released rules that establish an application process for states to request a waiver of innovation requirements that apply to health exchanges under health reform.
Applications will either go through HHS or the Treasury Department, depending on which provision a state is seeking to waive. Additionally, the regulations establish a state and federal public comment process as part of any waiver application.
States may apply to waive requirements related to:
- The establishment of qualified health plans, consumer choice and insurance competition
- Reduced cost-sharing for individuals enrolling in qualified health plans
- Refundable credits for coverage
- Shared responsibility for employers regarding health coverage
- Maintain minimum essential coverage
All states requesting a waiver must submit certain documentation and certifications to demonstrate that coverage will be at least as comprehensive and affordable as under exchanges, and cover as many people. States must also demonstrate that they will ensure cost-sharing protections for residents.
As part of their application, states must submit a financial and economic analysis with actuarial certifications and estimates, 10-year budget plan and a multitude of assessments including, but not limited to, the impact of the waiver on health insurance coverage and on the administrative burden for individuals, insurance companies and residents who require out-of-state-coverage.
Moreover, states that receive the waiver must engage in quarterly and annual progress reporting and periodic reviews, as well as host an annual public forum with comments. The quarterly and annual reports must document data on the progress of the waiver, compliance, a summary of the annual public forum as well as “other” information. The progress reports are to monitor the effect of the waiver on the choice of health plans and stability of coverage for individuals and employers, small business, individuals with pre-existing conditions and the low-income population.
Under health reform, the waiver process is not set to begin until 2017. However, bi-partisan legislation pending before Congress and supported by President Obama would move this date to 2014 to coincide with the beginning of health exchanges. Supporters say it would be irresponsible of HHS to expect states to establish one set of requirements in 2014 only to make changes three years later, especially given state budget and resource constraints. Others have indicated that these waivers will allow states, such as Vermont which is interested in a single-payer system, to establish and design their own health plans tailored to the needs of residents.
Meanwhile, reform opponents have opined that the very existence of these waivers actually proves that the PPACA is flawed since the federal government needs to provide states with “opt-out” processes. Other detractors have expressed concerns with the burden preparing a waiver application places on states. While the required materials do not appear to be inconsequential, at this point the regulations do not detail any documentation specifications.
The rule is currently in draft form, so it is possible that the final version will contain more detail. If not, the lack of clarity will leave states with a great deal of discretion when putting together a waiver application and, in turn, allow HHS and the Treasury wide latitude in reviewing, approving and denying applications.