Dispatch from NCSL Summit: 1332 Waivers a Hot Topic

State lawmakers kept returning to the topic of 1332 waivers during the annual Legislative Summit of the National Conference of State Legislatures in Seattle last week. No fewer than four of the NCSL Health and Human Services sessions touched on the state innovation waiver options that will become available in 2017. But while the 1332 waivers were a hot topic, it does not appear legislators are looking to embrace big changes anytime soon.

State legislatures have a role to play in approving section 1332 waivers

Under a 1332 waiver, states can ask the federal government for permission to change or ignore major elements of the Affordable Care Act. The first session of the newly created Task Force on Innovations in State Health Systems opened with a presentation by Heather Howard, director of the State Health Reform Assistance Network at Princeton University’s Woodrow Wilson School. Howard noted the 1332 waivers will require state legislative authority for approval.

She noted the waivers provide states with broad authority to reform the private health insurance market, but also include “four guardrails,” including a requirement that the new waiver program would cover as many people as the current system with comparable benefits.

Learn more about requirements of Section 1332 waivers.

Howard said that the 1332 waivers would be tougher to achieve in states that operate a federally facilitated marketplace. She said that Hawaii, Minnesota, and Rhode Island are currently working on waivers.

Lawmakers expressed concerns about 1332 waiver process and flexibility

An Arkansas legislator said his state has been looking at the waivers, but decided not to move forward now because there is little understanding of how federal officials will determine the coverage and budget neutrality requirements.

Lawmakers on the task force and in other sessions expressed a skepticism about the flexibility provided by the waivers. A Utah legislator suggested the guardrails might also end up being “chains” to restrict a state’s ability to pursue innovations. A Wyomingsenator said the cost to put together a waiver would be too expensive for a state as small as Wyoming and urged other legislators to wait until a new administration takes the reins in 2017.

During a session titled “What’s Next with States and the Affordable Care Act,” Joel Ario, a former state insurance commissioner and the founding director of the Office of Health Insurances Exchanges at the U.S. Department of Health and Human Services, touted the features of the 1332 waiver to allow states to modify or eliminate the individual and employer mandates and change benefits and subsidies on the marketplace.

He said that most of the initial 1332 waiver applications will be “small potatoes”—waivers that make technical changes to current laws, including definitions of Native Americans and requirements for small businesses on an exchange.

Whether states embrace these new waivers and how broad they will be should become apparent over the coming year as states begin submitting waiver applications to the federal government for approval.

More: Preparing for 1332 State Innovation Waivers: Will They Help or Harm?