Source: https://www.everycrsreport.com/changes/20190109_R44760_f7e1d32a78b413b68d6a9c1db9504514e4f90fd2__20191202_R44760_c0a3016132eb11ab15dae7c1bcb53adb44e44015.html
Timestamp: 2020-04-10 19:27:20
Document Index: 773443753

Matched Legal Cases: ['§18052', '§1312', '§1402', '§36', '§1401', '§1402', '§5000', '§1501', '§1311', '§1402']

Changes in State Innovation Waivers: Frequently Asked Questions from January 9, 2019 to December 2, 2019 - EveryCRSReport.com
Changes from January 9, 2019 to December 2, 2019
Updated January 9December 2, 2019 (R44760)
To obtain approval for a waiver application, a state must show that the plan it will implement in the absence of the waived provision(s) meets certain requirements. Under current guidance, the state's plan must provide coverage to as many state residents as would be covered absent the waiver and must make available to a comparable number of residents coverage that is both as affordable and as comprehensive as would beensure that a comparable number of state residents have health insurance coverage under the plan as would have had coverage absent the waiver. It also must provide a comparable number of residents with the opportunity to purchase coverage that is as affordable and comprehensive as would have been available absent the waiver. However, applications do not need to demonstrate that the affordable and comprehensive coverage will be purchased by a comparable number of state residents. Additionallycomparable number of residents would be enrolled in the affordable and comprehensive coverage, as would have been required under previous guidance. Finally, the state's plan cannot increase the federal deficit.
As of the date of this report, eight13 states—Alaska, Colorado, Delaware, Hawaii, Maine, Maryland, Minnesota, Montana, New Jersey, OregonNorth Dakota, Oregon, Rhode Island, and Wisconsin—have approved state innovation waivers. AllEight of these waivers were considered and approved under the initial state innovation waiver guidance, and all but one of the five were considered and approved under the current state innovation waiver guidance. Twelve of the 13 approved waivers implement a variant of a statewide individual market reinsurance program.
Under current guidance, the state's plan must provide health insurance coverage to as many state residents as would be covered absent the waiver and must make available to a comparable number of residents coverage that is both as affordable and as comprehensive as it would beensure that a comparable number of state residents have health insurance coverage under the plan as would have had coverage absent the waiver. It also must provide a comparable number of residents with the opportunity to purchase coverage that is as affordable and comprehensive as would have been available absent the waiver. However, applications do not need to demonstrate that the affordable and comprehensive health insurance coverage will be purchased by a comparable number of state residents. Additionallycomparable number of residents would be enrolled in the affordable and comprehensive coverage, as would have been required under previous guidance. Finally, the state's plan cannot increase the federal deficit.
This report answers frequently asked questions about how states can use and apply for state innovation waivers. It also addresses recent changes to the Section 1332 waiver process, as made by the 2018 CMS guidance.
At least as many individuals who hada comparable number of individuals who are forecasted to have health care coverage absent a waiver must have health care coverage under the waiver.a This requirement generally must be forecast to be met for each year the waiver is in effect, but a waiver may be approved if a temporary reduction in coverage would produce longer-term increases in coverage.
At least as many individuals who hadare forecasted to have minimum essential coverage (MEC) absent a waiver must have MEC under the waiver.b This requirement generally must be forecast to be met for each year the waiver is in effect.
At least as many individuals who had access to affordable and comprehensive health care coverage absent a waiver must have access to affordable and comprehensive health care coverage underIndividuals must be provided with the opportunity to purchase coverage that is at least as affordable and comprehensive as coverage available absent the waiver.d Applications do not need to demonstrate that the affordable and comprehensive coverage will actually be purchasedreceived by a comparable number of state residents.
An individual'sIndividuals' health care coverage under the waiver must be as affordable as coverage would be absent the waiver. Affordability is generally measured by comparing the sum of an individual's premium contributions and cost-sharing responsibilities for a health plan to the individual's income. Spending on health care services that are not covered by a health plan may be considered if the services are affected by the state's plan. This requirement generally must be forecast to be met for each year the waiver is in effect.
HealthIndividuals' health care coverage under the state planwaiver must be at least as comprehensive overall for individuals as coverageas their coverage would be absent the waiver. Comprehensiveness is measured by comparing coverage under the plan to coverage under the state's EHB benchmark plan or coverage under the state's Medicaid program and/or the State Children's Health Insurance Programs (CHIP), as appropriate.e This requirement generally must be forecast to be met for each year the waiver is in effect.
Projected federal spending net of federal revenues must be equal to or lower than it would be absent the waiver. The state's plan must not increase the federal deficit over the period of the waiver or in total over the 10-year budget plan submitted by the state as part of its application.fe
e. Under the ACA, certain health plans must cover the EHB. The ACA does not explicitly define the EHB; rather, it lists 10 broad categories from which benefits and services must be included and requires the Secretary of HHS to further define the EHB. For information about the 10 categories as well as how the EHB are currently defined, see CRS In Focus IF10287, The Essential Health Benefits (EHB).
f. The state innovation waivers cannot extend longer than five years unless a state requests continuation and such request is not denied by the appropriate Secretary. Statute requires that an application for a waiver include a 10-year budget plan that is budget neutral for the federal government (42 U.S.C. §18052(a)(1)(B)(ii)). This determination takes into account costs associated with changes to federal administrative processes.
g. This determination takes into account costs associated with changes to federal administrative processes.
Although not possible initially, HHS and the Treasury indicated in the updated guidance released in October 2018 that technical enhancements have made it feasible for CMS to support some federally facilitated health insurance exchange (FFE) variation.12 For example, waivers that would require a state to create its own website to replace the consumer-facing aspects of HealthCare.gov also can incorporate CMS's enrollment functionalities (e.g., account creation, application, enrollment and coverage maintenance experience for consumers). States are asked to work with HHS early in the waiver application process to determine whether specific modifications can be accommodated.
States are responsible for funding all FFE modifications and associated operational support. Therefore, these costs are not consideredAny changes to CMS administrative processes are taken into account when determining whether a waiver application satisfies the deficit neutrality requirement; however, any other changes to CMS administrative processes are taken into account.
waiver costs for technical and specialized services that CMS typically provides to states (and states cover the cost of) would not be included in such determinations.13
In guidance issued in October 2018, HHS and the Treasury describedescribed some federal operational considerations that may limit the scope of the waivers.1314 Specifically, the Internal Revenue Service (IRS) generally is not able to accommodate any state-specific changes to tax rules. The However, the IRS may be able to accommodate small changes to the administration of federal tax provisions, in particular when such changes overlap with the IRS's current capabilities.15 For example, waivers that would require the IRS to expand premium tax credit eligibility to individuals with household income under 100% of the federal poverty level may be feasible, because it incorporates a similar special rule that the IRS currently administers.14
A state seeking a state innovation waiver must enact a law that allows the state to carry out the actions under the waiver prior to submitting an application for a waiver.1517 In certain circumstances, a state can be considered to have enacted such a law by coupling a state law that enforces ACA provisions and/or the state plan with administrative or executive actions.1618 Prior to submitting an application, a state must provide a public notice and comment period and conduct public hearings regarding the state's application.1719 Upon conclusion of these activities, a state may submit its application to the Secretary of HHS. The Secretary of HHS is to transmit any application seeking to waive requirements in the IRC to the Secretary of the Treasury for review.
The Secretary or Secretaries (as appropriate) are to review a state's application to determine whether it is complete. A state's application is not considered complete unless it includes the materials identified in regulations.1820 The materials include, but are not limited to, information about the enacted state legislation allowing the state to carry out the actions under the waiver, a description of the plan or program the state expects to implement in place of the waived provisions, and analyses showing that the state's plan or program meets the requirements for granting a waiver. If a state's application is not complete, the state is to be notified about the missing elements and given an opportunity to submit them. Once the Secretary or Secretaries (as appropriate) make a preliminary determination that a state's application is complete, the entire application is to be made available to the public for review and comment.1921
The final decision of the Secretary or Secretaries on a state's application must be issued no later than 180 days after the determination that the Secretary of HHS received a complete application from a state.20
It is possible for a state to receive federal funding under an approved waiver. A state's receipt of a state innovation waiver could result in the residents of the state not receiving the "premium tax credits, cost-sharing reductions, or small business credits under sections 36B of the Internal Revenue Code of 1986 or under part I of subtitle E for which they would otherwise be eligible."2123 If this occurs, the state is to receive the aggregate amount of subsidies that would have been available to the state's residents had the state not received a state innovation waiver—this is referred to as pass-through funding. The amount of pass-through funding is to be determined annually by the appropriate Secretary and may be updated at any time to account for changes in state or federal law. The state is to use the pass-through funding for purposes of implementing the plan or program established under the waiver.22
State innovation waivers cannot extend longer than five years, unless a state requests continuation and such request is not denied by the appropriate Secretary.23the appropriate Secretary does not deny such request.25 Requests for continuation are to be deemed granted if they are not denied by the appropriate Secretary within 90 days of submissionunless, within 90 days of submission, the appropriate Secretary either denies the request or informs the state that additional information is needed for the Secretary to consider such request.
The Secretaries arewere required to develop a process for coordinating applications for state innovation waivers and applications for other existing waivers under federal law relating to the provision of health care, including waivers available under Medicare, Medicaid, and CHIP.
Under the coordinated process, a state must be able to submit a single application for a state innovation waiver and any other applicable waivers available under federal law.2426 The single application must comply with the procedures described for state innovation waiver applications and the procedures in any other applicable federal law under which the state seeks a waiver.25
As of the date of this report, 1420 states have submitted applications for state innovation waivers—Alaska, California, HawaiiColorado, Delaware, Hawaii, Idaho, Iowa, Maine, Maryland, Massachusetts, Minnesota, Montana, New Jersey, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, Vermont, and Wisconsin.2628 HHS and the Treasury have approved eight13 applications, from Alaska, Colorado, Delaware, Hawaii, Maine, Maryland, Minnesota, Montana, New Jersey, OregonNorth Dakota, Oregon, Rhode Island, and Wisconsin. AllEight of these waivers were considered and approved under the initial state innovation waiver guidance, and all but one of the five were considered and approved under the current state innovation waiver guidance. Twelve of the 13 approved waivers implement a variant of a statewide individual market reinsurance program.27
Idaho, Massachusetts, Ohio, and Vermont received notification from HHS and the Treasury that their applications were incomplete, and it does not appear that any of these states has modified its application in response to the notification. If one of these threefour states does take action, any further review of its waiver application would be under the updated state innovation waiver guidance (even if such state initially submitted its waiver under the initial guidance). California, Iowa, and Oklahoma have withdrawn their applications.2830
(as of January 4November 29, 2019)
Estimated Pass-Through Funding
Under the approved waiver, the Patient Protection and Affordable Care Act (ACA; P.L. 111-148) provision requiring issuers to consider all enrollees in individual plans offered by the issuer to be members of a single risk pool is waived,ab to the extent the provision prohibits issuers from including expected reinsurance payments from the ARP when establishing market-wide index rates.
The Centers for Medicare & Medicaid Services (CMS) estimatedindicated Alaska would receive $58.5 million for CY2018 and $68.7 million for CY2019.b
Under the approved waiver, multiple ACA provisions relating to the establishment and operation of a Small Business Health Options Program (SHOP) exchange, as they pertain to small employers and SHOP exchanges, are waived.cd As a result, Hawaii is no longer required to operate SHOP exchanges for small employers. The amount that small employers in Hawaii would have received in small business tax credits for coverage purchased through a SHOP exchange is provided to the state in pass-through funding to support a program that assists small employers with the cost of health insurance coverage.
CMS estimatedindicated Hawaii would receive $459,169428,864 for CY2017, $999,069933,130 for CY2018, and $306,406287,409 for CY2019.b
Maine established a hybrid state-based reinsurance/invisible high-risk pool program administered by the Maine Guaranteed Access Reinsurance Association (MGARA). Starting in CY2019, MGARA will help, which helps health insurance issuers offering plans in the individual market offset the cost of covering enrollees with one or more of eight specified high-cost conditions. Under the waiver, health insurance issuers offering plans in the individual market also will have the discretion to include additional enrollees in the program if such determinations are made during the first 60 days of an enrollee's plan year.
Maine's approved waiver is similar to other reinsurance-type waivers in that the ACA provision requiring issuers to consider all enrollees in individual plans offered by the issuer to be members of a single risk pool is waived,ab which allows issuers to consider MGARA payments when setting market-wide index rates. The expected effect is that individual market premiums will decrease and federal spending on premium tax credits for residents of Maine will decrease. The state will receive the resulting reductions in federal spending as pass-through funding. Under the approved waiver, Maine willis to use the pass-through funding to support MGARA and corresponding payments to issuers beginning in CY2019.
CMS estimated Maine would receive $65.2 million for CY2019.b
Maryland established a state-based reinsurance program administered by the Maryland Health Benefit Exchange. Starting in CY2019, the reinsurance program will reimburse, which reimburses issuers selling coverage in the state's individual market for a percentage of enrollees' claims between an attachment point and a cap.
Maryland's approved wavier is similar to other reinsurance-type waivers in that the ACA provision requiring issuers to consider all enrollees in individual plans offered by the issuer to be members of a single risk pool is waived,ab which allows issuers to consider the state's reinsurance program payments when setting market-wide index rates. The expected effect is that individual market premiums will decrease and federal spending on premium tax credits for residents of Maryland will decrease. The state requested to receive a portion of the resulting reductions in federal spending as pass-through funding. Under the waiver, Maryland willis to use the pass-through funding to support the reinsurance program and corresponding payments to issuers beginning in CY2019 and continuing through CY2021, unless additional funds become available.d
CMS estimatedindicated Maryland would receive $373.4 million for CY2019.b
CY2019-CY2023d
Approvedeh—September 22, 2017
Minnesota's approved waiver is similar to other reinsurance-type waivers in that the ACA provision requiring issuers to consider all enrollees in individual plans offered by the issuer to be members of a single risk pool is waived,ab which allows issuers to consider MSPS payments when setting market-wide index rates. The expected effect is that individual market premiums will decrease and federal spending on premium tax credits for residents of Minnesota will decrease. The state will receive the resulting reductions in federal spending as pass-through funding. Under the waiver, Minnesota is to use the pass-through funding to support MSPS and corresponding payments to issuers beginning in CY2018.
CMS estimatedindicated Minnesota would receive $130.7 million for CY2018 and $84.8 million for CY2019.b
New Jersey established a state-based reinsurance program, the Health Insurance Premium Security Plan. Starting in CY2019, the reinsurance program will reimburse, which reimburses issuers selling coverage in the state's individual market for a percentage of enrollees' claims between an attachment point and a cap.
New Jersey's approved wavier is similar to other reinsurance-type waivers in that the ACA provision requiring issuers to consider all enrollees in individual plans offered by the issuer to be members of a single risk pool is waived,ab which allows issuers to consider the state's reinsurance program payments when setting market-wide index rates. The expected effect is that individual market premiums will decrease and federal spending on premium tax credits for residents of New Jersey will decrease. The state will receive the resulting reductions in federal spending as pass-through funding. Under the waiver, New Jersey willis to use the pass-through funding to support the reinsurance program and corresponding payments to issuers beginning in CY2019.
CMS estimatedindicated New Jersey would receive $180.2 million for CY2019.b
Oregon's approved wavier is similar to other reinsurance-type waivers in that the ACA provision requiring issuers to consider all enrollees in individual plans offered by the issuer to be members of a single risk pool is waived,ab which allows issuers to consider ORP payments when setting market-wide index rates. The expected effect is that individual market premiums will decrease and federal spending on premium tax credits for residents of Oregon will decrease. The state will receive the resulting reductions in federal spending as pass-through funding. Under the waiver, Oregon is to use the pass-through funding to support ORP and corresponding payments to issuers beginning in CY2018.
CMS estimatedindicated that Oregon would receive $54.5 million for CY2018 and estimated that the state would receive $41.8 million for CY2019.b
Wisconsin established a state-based reinsurance program, the Wisconsin Healthcare Stability Plan (WIHSP). Starting in CY2019, the WIHSP will reimburse, which reimburses issuers selling coverage in the state's individual market for a percentage of enrollees' claims between an attachment point and a cap.
Wisconsin's approved wavier is similar to other reinsurance-type waivers in that the ACA provision requiring issuers to consider all enrollees in individual plans offered by the issuer to be members of a single risk pool is waived,ab which allows issuers to consider WIHSP payments when setting market-wide index rates. The expected effect is that individual market premiums will decrease and federal spending on premium tax credits for residents of Wisconsin will decrease. The state will receive the resulting reductions in federal spending as pass-through funding. Wisconsin willis to use the pass-through funding to support WIHSP and corresponding payments to issuers beginning in CY2019.
CMS estimatedindicated Wisconsin would receive $127.7 million for CY2019.b
Under the proposed waiver, the ACA provision that provides for cost-sharing subsidy payments to issuers from HHS would be waived,fk which Massachusetts indicates would allow the state to substitute these payments with allocations from the PSF. The expected effect is that individual market premiums would decrease and federal spending on premium tax credits for residents of Massachusetts also would decrease. The state would receive the resulting reductions in federal spending as pass-through funding.
Ohio is seeking to waive the requirement that individuals must maintain minimum essential coverage, as established under the ACA's individual mandate provision.gl Under the proposed waiver, the requirement would be waived beginning in CY2019.h
Ohio is not requesting pass-through funding
Under the proposed waiver, Vermont seeks to waive multiple ACA provisions relating to the establishment and operation of a SHOP exchange.in As a result, Vermont indicates that employers in the small-group market would purchase qualified health plans directly from an issuer.
Under this waiver, the ACA provision that prohibits the marketing of nonqualified health plans (QHPs) on the exchanges would have been waived,jo which California indicates would have allowed "California Qualified Health Plans (CQHP)" to be offered through its exchange. CQHPs would have differed from QHPs only in that undocumented individuals could purchase CQHPs and enrollment in CQHPs would disqualify individuals from receiving premium tax credits and cost-sharing subsidies.
Under this waiver, Iowa sought to waive the following ACA provisions.kp
Oklahoma's withdrawn waiver was similar to Minnesota's, Alaska's, and Oregon's approvedother reinsurance-type waivers in that the ACA provision requiring issuers to consider all enrollees in individual plans offered by the issuer to be members of a single risk pool would have been waived,ab which would have allowed issuers to consider OMSP payments when setting market-wide index rates. The expected effect was that individual market premiums would have decreased and federal spending on premium tax credits for residents of Oklahoma also would have decreased. The state would have received the resulting reductions in federal spending as pass-through funding. Under the waiver, Oklahoma would have used the pass-through funding for OMSP payments to issuers beginning in CY2018.
Source: Various documents available on the CMS website, "Section 1332: State Innovation Waivers," at https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Section_1332_State_Innovation_Waivers-.html, viewed June 5, 2018November 1, 2019.
Notes: Estimated pass-through funding describes either the amount of pass-through funding that a state estimates it will receive in its waiver application or, when available, the amount of pass-through funding CMS estimates it will provide to the state as determined annually by the Secretary of the Department of Health and Human Services and/or the Secretary of the Department of the Treasury (as appropriate). For more information on reinsurance, see CRS In Focus IF10707, Reinsurance in Health Insurance, by [author name scrubbed].
a. a. CMS has not communicated the amount of pass-through funding for approved waivers in CY2020. b. Specifically, ACA §1312(c)(1).
b. The actual amount received by the state is subject to a final determination by the Department of the Treasury and, subsequently, budget sequestration.
cc. Although waivers can be approved for a period of up to five years, the Colorado application requested, and was approved for, an effective period from CY2020 through CY2021. d. Specifically, the following ACA §§: 1301(a)(1)(C)(ii); 1301(a)(2); 1304(b)(4)(D)(i) and (ii); 1311(b)(1)(B); 1312(a)(2); 1312(f)(2)(A); and 1321(c)(1).
de. The final amounts of pass-through funding received by Hawaii account for budget sequestration. f. The final amount of pass-through funding received by Maine in 2019 is subject to a final administrative determination by the Department of the Treasury and any changes in Maine law or regulations that would affect the waiver (e.g., Medicaid expansion). g. Although Maryland's waiver application anticipated having enough funds to operate the Maryland State Reinsurance Program from CY2019 through CY2021, the application requested, and was approved for, an effective period from CY2019 through CY2023.
eh. In addition to what is described in the table about Minnesota's approved waiver, Minnesota's waiver application also requested that the state receive, in pass-through funding, the amount that the federal government would save in payments to Minnesota's Basic Health Program because of premium reductions due to MSPS. This request was not granted under the approved waiver. For details, see Letter from Mark Dayton, Governor of Minnesota, et al. to Thomas Price, Secretary of the U.S. Department of Health and Human Services, September 19, 2017, http://mn.gov/gov-stat/pdf/2017_09_19_Governor_Dayton_Letter_to_Secretary_Price_1332_Waiver.pdf, and Letter from Mark Dayton, Governor of Minnesota, to Seema Verma, Administrator of the Centers for Medicare & Medicaid Services, October 16, 2017, https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/Approval-Letter-MN.pdf.
fi. The final amount of pass-through funding received by Oregon in 2019 is subject to a final administrative determination by the Department of the Treasury. j. Idaho applied to waive ACA §1402 and 26 U.S.C. §36B(c)(2)(B), the latter of which was added to the Internal Revenue Code by ACA §1401. k. Massachusetts applied to waive ACA §1402(c)(3)(A).
gl. Ohio applied to waive 26 U.S.C. §5000A(a), which was added to the Internal Revenue Code by ACA §1501.
hm. Ohio's House Bill 49 requires Ohio's department of insurance to submit a 1332 waiver application that includes a request to waive the ACA's individual and employer mandates. In its waiver application, Ohio acknowledges that the 2017 tax revision (P.L. 115-97) effectively eliminates the penalty associated with the individual mandate beginning in CY2019 but points out that the law does not eliminate the individual mandate. As such, Ohio's 1332 waiver application requests to waive the individual mandate (however, the application does not include a request to waive the employer mandate).
in. Vermont applied to waive the following ACA §§: 1311(b)(1)(B); 1311(c)(3); 1311(c)(4); 1311(c)(5); 1311(d)(1); 1311(d)(2); 1311(d)(4)(A); 1311(d)(4)(B); 1311(d)(4)(C); 1311(d)(4)(D); 1311(d)(4)(E); 1311(d)(4)(G); 1311(k); 1312(a)(2); 1312(f)(2)(A).
jo. California applied to waive ACA §1311(d)(2)(B)(i).
kp. Iowa applied to waive ACA §§1402; 1401(a); 1302(d); and 1332(d).
[author name scrubbed]Ryan J. Rosso, Analyst in Health Care Financing ([email address scrubbed], [phone number scrubbed])
For more information about the employer mandate, see CRS Report R43981R45455, The Affordable Care Act's (ACA's) Employer Shared Responsibility Determination and the Potential Employer PenaltyProvisions (ESRP).
14Specifically, CMS services covered under the Intergovernmental Cooperation Act (ICA) are not considered for deficit neutrality purposes.
15. States are responsible for funding all changes to IRS administrative processes associated with wavier implementation. These costs are incorporated into the assessment of whether a waiver application satisfies the deficit neutrality requirement. 16.