- The Washington Times - Thursday, November 29, 2018

The Trump administration on Thursday outlined ways that states can skirt Obamacare, freeing adventurous governors and legislators to spend federal money on health plans that don’t meet the strict standards of the law’s exchanges.

States can now ask for permission to subsidize cheaper, skimpier plans that don’t cover everything mandated under Obamacare, but that might be more attractive to budget-conscious consumers.

Or, under another option, states could convert Obamacare’s subsidies into a fixed contribution to cover individuals as they float between the exchanges and Medicaid, or use the money to cover out-of-pocket costs, so customers could choose a plan with lower premiums and a high deductible if they wish.

Seema Verma, administrator of the Centers for Medicare and Medicaid Services, said the expansive approach will give states a freer hand to rectify flaws in the program, after President Obama kept a lid on state experimentation.

“For far too long states have looked to Washington with a ‘Mother, may I?’ approach,” Ms. Verma told the American Legislative Exchange Council, a group of conservative state legislators.



Democrats wrote the waivers, dubbed “1332s,” into their massive health law eight years ago, figuring states might want to build on the program by experimenting with their own insurance models.

The Trump administration, though, views the waivers as a way to let states go around the program.

The Affordable Care Act has struggled to attract enough healthy customers to balance out the influx of sicker customers who took advantage of its benefits, resulting in premium increases that have scared off people who earn too much for federal subsidies.

“Seeing the problems the ACA created and seeing the lack of federal action to address these problems should be proof enough for why it was such a mistake to federalize so much of health care policy under the ACA,” Ms. Verma said.

She said one red line is that states cannot ask to waive Obamacare’s protections for those with pre-existing conditions, and she said the administration will pore over all requests to ensure that poorer and sicker Americans aren’t harmed.

Larry Levitt, senior vice president at the Kaiser Family Foundation, said the waivers may still pose problems for sicker Americans. More subsidies going to noncompliant plans likely means less financial help for people in robust Obamacare plans.

Directing subsidies to noncompliant plans will also make them more attractive, potentially siphoning even more healthy people out of the Obamacare markets. Under the law’s framework, those healthy people are needed to cross-subsidize sicker enrollees.

“While protections for pre-existing conditions would be technically maintained [under the waivers], plans that cover people with those conditions could end up being a lot more expensive if states make use of this new flexibility,” Mr. Levitt said.

House Minority Leader Nancy Pelosi fumed over the announcement, saying Republicans learned nothing from bruising midterm defeats that saw Democrats, running on pro-Obamacare platforms, win control of the House.

“The American people have spoken loud and clear: Republicans’ health care sabotage must stop immediately,” she said.

Democrats are discussing ways to expand taxpayer-funded programs to plug holes in Obamacare, such as lowering the eligibility age for Medicare or letting people older than 50 “buy in” to the program.

Premiums and plan offerings for the coming year are set, so consumers probably won’t see big changes from Mr. Trump’s waiver options until at least 2020. It’s also unclear if and when states will step forward and request big changes.

Red states like Idaho and Iowa have sought to offer cheaper, skimpier plans to healthy residents who’ve been priced out of the Obamacare exchanges, so they might be among the first to bite.

States have been able to request 1332 waivers since 2017.

CMS has approved eight so far — Hawaii made technical changes to their small-business coverage model, while seven states sought “reinsurance” programs that blunt the cost of extra-pricey customers, so everyone else can pay less.

The Trump administration said reinsurance, an idea that’s popular in both parties, is still a promising avenue for waiver proposals.

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