Source: https://www.everycrsreport.com/changes/20171010_R44760_2b1beacab13557616789c578487281638891944a__20180328_R44760_b2a9b9745d23812c572e728b288f05ab63a8eb99.html
Timestamp: 2019-02-18 12:58:45
Document Index: 494066204

Matched Legal Cases: ['§1301', '§1301', '§1304', '§1311', '§1312', '§1312', '§1312', '§1402', '§1311', '§1402']

Changes in State Innovation Waivers: Frequently Asked Questions from October 10, 2017 to March 28, 2018 - EveryCRSReport.com
Changes from October 10, 2017 to March 28, 2018
State InnovationInnovation Waivers: Frequently Asked Questions
October 10, 2017March 28, 2018 (R44760)
The Secretary of the Department of Health and Human Services (HHS) and the Secretary of the Treasury share responsibility for reviewing state innovation waiver applications and deciding whether to approve applications. The earliest a state innovation waiver could have gone into effect was January 1, 2017. As of the date of this report, four states—Alaska, Hawaii, Minnesota, and Oregon—have approved state innovation waivers. Three states—California, Iowa, and Oklahoma—submitted waiver applications and have since withdrawn their applications. Massachusetts and Vermont both have submitted applications and received notification from the Centers for Medicare & Medicaid Services (CMS) that their applications were incomplete. It does not appear that either state has modified its application in response to the notifications as of the date of this report. State InnovationAlaska, Hawaii, and Minnesota are the only states with approved state innovation waivers. Hawaii's waiver is approved for calendar years (CY) 2017 through 2021; Alaska's and Minnesota's waivers are approved for CY2018-CY2022. Five other states—California, Iowa, Oklahoma, Oregon, and Vermont—have submitted waiver applications. California and Oklahoma have since withdrawn their applications, and the other state applications are pending.
Section 1402 of the ACA: Provision of cost-sharing subsidiesreductions to eligible individuals who purchase non-group health insuranceindividual market coverage through a health insurance exchange.3
Section 36B of the Internal Revenue Code (IRC): Provision of premium tax credits to eligible individuals who purchase non-group health insurance through anindividual market coverage through a health insurance exchange.
In guidance issued in December 2015, HHS and the Treasury describe some federal operational considerations that may limit the scope of the waivers.10 HHS administers all federally facilitated health insurance exchanges (FFEs), and it operates the same infrastructure technology platform in each state that has an FFE. The agencies explain that HHS cannot accommodate any state-specific changes to FFE platforms. For example, waivers that would require a state's FFE to use different rules for calculating the financial assistance available to an individual in the state are not feasible. Similarly, the Internal Revenue Service (IRS) cannot accommodate any state-specific changes to tax rules. For example, waivers that would require the IRS to use different eligibility rules for premium tax credits for individuals in one state are not feasible.
As of the date of this report, eightnine states have submitted applications for state innovation waivers—Alaska, California, Hawaii, Iowa, Massachusetts, Minnesota, Oklahoma, Oregon, and Vermont.22 The Centers for Medicare & Medicaid Services (CMS) has approved Alaska's, Hawaii's, and Minnesota's applications. Hawaii's waiver is approved for the period CY2017-CY2021; Alaska's and Minnesota's waivers are approved for the period CY2018-CY2022. California and Oklahoma have withdrawn their applications.23 The applications submitted by Iowa, Oregon, and Vermont are pending.
four applications, from Alaska, Hawaii, Minnesota, and Oregon. California, Iowa, and Oklahoma have withdrawn their applications.23 Massachusetts and Vermont both received notification from CMS that their applications were incomplete, and it does not appear that either state has modified its application in response to the notifications. See Table 2 for more details.
(as of October 10, 2017March 19, 2018)
Approved—July 717, 2017
Alaska established a state-based reinsurance program, the Alaska Reinsurance Program (ARP), to help health insurance issuers offering plans in the individual market offset the cost of covering specified high-cost conditions for enrollees.
Under the approved waiver, the ACAPatient 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,a to the extent the provision prohibits issuers from including expected reinsurance payments from the ARP when establishing its market-wide index rate.
The Centers for Medicare & Medicaid Services (CMS) estimated Alaska will receive $48.4 million for calendar year (CY)2018 and $322.7 million over the period CY2018-CY2022
Estimated to beCMS estimated Hawaii would receive $459,169 for CY2017 and, $999,069 for CY2018
Estimated to be, and $2.8 million over the period CY2017-CY2021
August 21May 5, 2017
May 5Approvedc—September 22, 2017
Minnesota established a state-based reinsurance program, the Minnesota Premium Security Plan (MSPS). Starting in CY2018, the MSPS will reimburse issuers selling coverage in the state's individual market for a percentage of enrollees' claims between an attachment point and a cap.
Minnesota's approved waiver is similar to Alaska's and Oregon's 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,a 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 will use the pass-through funding for MSPS payments to issuers beginning in CY2018.
CMS estimated Minnesota will receive $139.2 million for CY2018 and $1,002.8 million over the period CY2018-CY2022
MinnesotaOregon established a state-based reinsurance program, the Minnesota Premium Security Plan (MSPS), to help stabilize the state's individual market.
Minnesota's approved waiver is similar to Alaska'sOregon Reinsurance Program (ORP). Starting in CY2018, the ORP will reimburse issuers selling coverage in the state's individual market for a percentage of enrollees' claims between an attachment point and a cap. Oregon's approved wavier is similar to Alaska's and Minnesota's. 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 beis waived,a which would allowallows issuers to consider MSPSORP payments when setting market-wide index rates. The expected effect is that individual market premiums wouldwill decrease and federal spending on premium tax credits for residents of Minnesota wouldOregon will decrease. The state wouldwill receive the resulting reductions in federal spending as pass-through funding. Under the waiver, Minnesota wouldOregon will use the pass-through funding for MSPSORP payments to issuers beginning in CY2018.
The approved waiver woulddoes not modify the eligibility criteria for premium tax credits for residents of MinnesotaOregon.
Estimated to be $1,002.8 million over the period CMS estimated that Oregon will receive $54.5 million for CY2018.d CY2018-CY2022
August 16September 8, 2017
b. Specifically, the following ACA sections: §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 §Received notification of incomplete application from CMS—October 23, 2017
Massachusetts is seeking to create a Premium Stabilization Fund (PSF), which would be used to reimburse issuers amounts equal to what would have been provided by cost-sharing reduction payments.
Under the proposed waiver, the ACA provision that provides for cost-sharing subsidy payments to issuers from HHS would be waived,e 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.
Massachusetts estimated it would receive between $143 and $146 million for CY2018
Received notification of incomplete application from CMS—June 9, 2016
Under the proposed waiver, Vermont seeks to waive multiple ACA provisions relating to the establishment and operation of a SHOP exchange.f As a result, Vermont indicates that employers in the small-group market would purchase qualified health plans directly from an issuer.
Vermont is not requesting pass-through funding
Under this waiver, the ACA provision that prohibits the marketing of non-qualified health plans (QHPs) on the exchanges would have been waived,g 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.
California did not request pass-through funding
Under this waiver, Iowa sought to waive the following ACA provisions.h
Iowa estimated it would have received $422 million for CY2018
Oklahoma established a state-based reinsurance program, the Oklahoma Individual Health Insurance Market Stabilization Program (OMSP). Had the waiver been approved, the OMSP would have reimbursed issuers selling coverage in the state's individual market for a percentage of enrollees' claims between an attachment point and a cap.
Oklahoma's withdrawn waiver was similar to Minnesota's, Alaska's, and Oregon's approved 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,a 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.
Oklahoma estimated it would have received $309 million for CY2018 and $1,395 million over the period CY2018-CY2022
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 March 19, 2018.
a. Specifically, ACA §1312(c)(1). b. 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).
, 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. d. In the Specific Terms and Conditions agreed to by HHS and Oregon, HHS indicates pass-through funding for 2019-2022 will be calculated annually and communicated to Oregon no later than October 31 of the preceding year. e. Massachusetts applied to waive ACA §1402(c)(3)(A). f. 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). g. California applied to waive ACA §1311(d)(2)(B)(i). h. Iowa applied to waive ACA §§1402; 1401(a); 1302(d); and 1332(d).
For more information about cost-sharing subsidies and premium tax credits, see CRS Report R44425, Health Insurance Premium Tax Credits and Cost-Sharing Subsidiesthe current status of the cost-sharing subsidies, see CRS Insight IN10786, Payments for Affordable Care Act (ACA) Cost-Sharing Reductions.
The 2017 tax revision, P.L. 115-97, effectively eliminates the individual mandate penalty beginning in 2019.