Columbus, OH – The Buckeye Institute’s Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy, submitted public comments on Ohio’s two Medicaid waiver proposals—the work and community engagement waiver and the state innovation or 1332 waiver.

“After years of failure in Washington, these waivers represent the first step in Ohio repairing its broken health insurance markets,” said Rea S. Hederman Jr., executive director of the Economic Research Center at The Buckeye Institute and vice president of policy. “While we applaud these proposals, we encourage policymakers to take bigger, bolder strides to blaze a trail of innovative health insurance reforms that the rest of the country can follow.”

Work and Community Engagement Wavier 

Pointing out that Medicaid was drastically changed under the Affordable Care Act, Hederman said in his public comments, “Encouraging healthy, able-bodied adults to remain in the workforce or engage in other educational and training activities, Ohio’s proposed Section 1115 waiver will enhance lifetime earnings, income, and health. By enhancing the health of the covered Medicaid enrollees, Ohio’s proposed waiver meets the twin goals of the waiver demonstration project by promoting economic stability and improving health.”

While noting that “Ohio’s waiver proposal pursues sound public policy,” Hederman outlined recommended improvements to the proposal in several key areas: data collection, self-reporting, age requirements, auditing beneficiary reporting, and emphasizing the disincentives to work created by expanded-Medicaid.

State Innovation or 1332 Waiver

Although the recent federal tax reform legislation reduced the tax penalty for violating the individual mandate to $0, Hederman said that “the mandate itself remains in federal law and the penalty could be raised again someday.”

Hederman went on to urge policymakers to use the Section 1332 process to explore new alternatives to the status quo. “Policymakers could, for instance, request a waiver from the Affordable Care Act’s employer mandate. Combining such a waiver with a reinsurance waiver like Alaska’s could help the individual market while alleviating a significant burden for small businesses. Ohio should use the waiver process boldly and creatively to lower individual insurance premiums and stabilize the state’s insurance market.”

As repeal of the Affordable Care Act floundered at the federal level, Hederman, an expert in health care policy, was the first to propose using section 1332 waivers as a way to allow states to waive parts of the law and take back the ability to regulate their insurance markets. Hederman, and co-author Dennis G. Smith, outlined this approach in the report Returning Health Care Power to the States.

More recently, in Federal Efforts to Stabilize ACA Individual Markets through State Innovation, a study for the Mercatus Center at George Mason University, Hederman and Doug Badger with the Galen Institute argue that Congress and the administration should empower states to devise new ways to make health insurance more affordable for more people.

The Buckeye Institute’s public comments were filed on Friday, March 16, 2018.

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