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The Buckeye Institute’s Rea Hederman: Changes to 1332 Waivers Step in the Right Direction, Replaces Onerous Burdens

Oct 22, 2018

Columbus, OH – Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute, issued the following statement regarding today’s announcement by the U.S. Department of Health and Human Services regarding new guidance on Section 1332 waivers in the Affordable Care Act.

“This new guidance on Section 1332, or state innovation waivers, issued by the Department of Health and Human Services is a step in the right direction and finally replaces the onerous burdens which made 1332 waivers a nearly useless tool in allowing states to fix their health care systems.

“The most notable change, which The Buckeye Institute had called for since shortly after the passage of the Affordable Care Act (ACA), was the change to allow the cost of a waiver to be calculated over the entire life of the waiver rather than by each year. As a result of the new change, overall cost savings to the program will be taken into account when considering a waiver application. Another key change is to allow states to consider the total number of people impacted by a waiver, which will make it easier for states to seek and implement reforms. States may also use more forms of health coverage such as short-term insurance plans to meet waiver requirements.

“While today’s guidance does not fix all of the limitations on 1332 waivers, they are changes that The Buckeye Institute and Ohio Senate President Larry Obhof have fought to fix in meetings with White House and Health and Human Services officials, and we are pleased that Washington, DC has heeded our call to help the states address problems in the ACA.

“States now have new flexibility in how they offer health coverage to their citizens—an important first step in fulfilling the potential of the innovation waivers, and we urge the Trump Administration and Congress to make further changes, which will enable the states to fix their health care systems and address the rising cost of health care.”

As designed, 1332 or state innovation waivers allow states to waive certain parts of the Affordable Care Act that govern insurance rules and some fiscal rules. However, in a break with standard practice on approving waivers, guidance issued during the Obama Administration created onerous standards under which waivers were approved, making it nearly impossible to for a state to design a waiver to meet the guidance requirements.

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