Time is running out for the administration to approve California’s push to allow illegal immigrants to use its Obamacare exchange, likely dooming the effort as President Obama prepares to hand the reins over to President-elect Donald Trump.
The 2010 health law specifically banned illegal immigrants from signing up for Obamacare, with Capitol Hill Democrats fearing at the time that it was too politically charged.
But California Democrats argue the politics have changed, and say denying illegal immigrants a chance to buy into Obamacare on their own dime is unfair.
“I know it’s not impossible. Now that our application is complete, we’re going to exercise any influence we have to see if we can make this happen,” said State Sen. Ricardo Lara, a Democrat who spearheaded legislation to create the waiver. “I’m going to remain hopeful until Jan 20.”
California first made its request, known as a “1332 waiver,” earlier this year. But the Centers for Medicare & Medicaid Services sent the application back as incomplete in mid-November.
Mr. Lara said they resubmitted their proposal last week and are hoping for a final expedited review before Mr. Trump, who has taken a harder stance on illegal immigrants, takes office.
Authored by Sen. Ron Wyden, Oregon Democrat, the “1332” waiver program allows states to act as laboratories for health care reform starting in 2017, freeing them to go around what Obamacare prescribes while keeping the money it would have received in the form of taxpayer subsidies under the law.
Mr. Trump and his transition team haven’t signaled how they’ll handle 1332 waivers, and the team didn’t return requests for comment for this story.
Yet approval of California’s proposal would be at odds with Mr. Trump’s campaign rhetoric calling for stiffer enforcement against illegal immigrants and complaining about taxpayer-funded benefits that sometimes flow to them.
And Mr. Trump’s pick to be attorney general, Sen. Jeff Sessions of Alabama, told The Washington Times in September that authorizing California’s change would encourage illegal immigration by allowing people who aren’t supposed to be in the country to access safety-net programs.
“If the political rhetoric is true of the Trump administration, the least of our worries is this waiver in California,” Mr. Lara said. “We’re going to, again, hope that the waiver gets approved within the Obama administration.”
Besides California, Hawaii and Vermont have requested less controversial changes to how Obamacare’s small business exchanges, or SHOPs, are implemented in their states, while Alaska plans to submit a waiver that would help it subsidize an insurance market with few enrollees and a high number of sick customers.
Health and Human Services Department officials determined Sept. 26 that Hawaii’s application was complete, triggering an official decision within 180 days.
A CMS spokesman declined to speculate on the fate of California’s waiver, though multiple policy analysts said the prognosis isn’t good for beating the Jan. 20 deadline.
Collecting public comments alone could take a month, based on the experience from Hawaii’s application.
“I don’t think it can move on at this point,” said Cheryl Fish-Parcham, who tracks the issue as director of access initiatives at Families USA, a nonprofit that advocates for affordable health coverage.
Looking ahead, the GOP is eyeing the 1332 waivers as a tool for moving away from Obamacare, rather than build on it, as the law’s architects intended.
House GOP leaders recently asked governors and state insurance commissioners if they plan to use the waiver process, and if expedited approval from the new administration would helpful.
Yet Republicans might be able to push the envelope only so far, since the law set down guardrails that say the waivers cannot raise the federal deficit or cover fewer people than Mr. Obama’s design.
“You can’t just take the money and put it into health savings accounts,” said Timothy Jost, a law professor at Washington and Lee University in Virginia who tracks the health care law. “You have to cover effectively the same number of people with the same generosity of benefits.”