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Monday, August 7, 2017

How States Are Using 1332 Waivers under the Affordable Care Act

Several states are now pursuing 1332 waivers. We have heard about several helpful proposals, and at least one that is troubling.

On the positive side, Alaska’s reinsurance waiver was recently approved. This waiver will allow Alaska to pass through federal savings resulting from the state’s reinsurance system. Partly as a result of this system, Alaska’s individual market insurer has proposed a 22 percent reduction in premium rates for next year.

Families USA has released a new whitepaper entitled Alaska’s Reinsurance 1332 Waiver: An Approach that Can Work

This white paper can help advocates understand an approach to reinsurance that their states could also take advantage of under current law to lower premiums in their marketplaces and better distribute the costs of very sick insurance enrollees.

Other 1332 waivers: Minnesota and Iowa

Minnesota and Oklahoma also have reinsurance proposals pending, with slightly differing systems from Alaska’s.

On the troubling side, Iowa has proposed a 1332 waiver that would restructure premium credits and eliminate cost-sharing reductions, leaving low- and middle-income people paying more for insurance, as well as providing for reinsurance.

Due to rising premiums and the exit of some marketplace insurers, many individual consumers supported Iowa’s proposal during the public comment period while a few advocacy organizations raised concerns about the increased costs of people who qualify for subsidies – see the comments of the Child and Family Policy Center and Doug Bickford of the American Diabetes Association, for examples of the types of concerns advocates raised. Iowa has asked the federal government to shorten normal procedures for reviewing its waiver, so we do not yet know what public comment period will be available at the federal level.

We know that other states may also be considering 1332 proposals on a fast-track. Please be on the look-out for any that are emerging in your state and please let us know about them at contact@familiesusa.org.