The Trump administration on Tuesday encouraged states to ask for Obamacare waivers to set up high-risk pools, creating a pathway for interested states to begin to adopt key parts of the GOP’s repeal plans even before they pass a bill through Congress.
Officials said the flexibility is needed to save Obamacare from its own shortcomings, saying states need to start experimenting with what works for them, rather than being bound to the top-down model of the Affordable Care Act.
“The failure of the individual marketplace under Obamacare is driving insurers out of counties and states at an alarming rate, leaving millions of Americans without choices for affordable health insurance,” Health and Human Services Secretary Tom Price said. “The innovation waiver process provides Americans relief from the damage Obamacare continues to inflict on health insurance markets.”
It’s a major shift for the waivers, which under President Obama had been viewed by liberal-leaning states as a way to experiment with going beyond Obamacare — perhaps by trying single-payer insurance or letting illegal immigrants buy plans on the Obamacare exchanges.
Under Mr. Price, however, HHS wants states to start thinking like Alaska, which is establishing a “reinsurance” program to subsidize insurers and prevent rate hikes, as Republicans who control Congress and the White House focus on cutting costs in lieu Mr. Obama’s pursuit of universal health coverage.
HHS released a checklist that would help states set up a similar program or a high-risk pool designed to subsidize sicker patients apart from the rest of the customer base, so that healthier people can pay less.
High-risk pools are a key ingredient of the Obamacare replacement bill that passed the House and is being debated in the Senate, though detractors say they’re often underfunded, leading to wait lists or high costs for people with preexisting medical conditions.
The concept of reinsurance, or subsidies for insurers who take on high-risk customers, has more bipartisan appeal.
“The current administration is using it to highlight reports of big premium increases, and as a potential bridge to a new system,” said Larry Levitt, a senior vice president at the nonpartisan Kaiser Family Foundation. “There is a certain awkwardness, though, in pushing the idea of ACA waivers at the same time they’re working to repeal and replace the law itself.”
Formally known as “Section 1332 waivers,” they were devised by Sen. Ron Wyden, Oregon Democrat, during the Obamacare debate as a way of letting states keep federal money while escaping some of the law’s mandates, trying to find better ways to ensure their residents get health coverage.
Waivers only began in 2017, so Mr. Obama’s HHS only had time to approve one application — from Hawaii, which proposed technical changes to its small-business exchange.
California withdrew its application to let illegal immigrants use its exchange.
Now the Trump administration is looking to harness the waivers to give states a path to move away from Obamacare’s constraints while Congress works to pass a repeal.
Under the bill that passed the House this month, states could opt to waive the part of Obamacare requiring insurers to cover a slate of benefits such as maternity and mental health care and let them charge sicker patients more than healthy ones, so long as they used risk-sharing pools.
Mr. Wyden said he didn’t envision waivers being used this way when he pushed for them as part of the Affordable Care Act.
“You don’t get to waive the essential benefits, you don’t get to gut the preexisting condition protections,” the Oregon Democrat said.
Leveraging the waiver program to pave the way for dismantling Obamacare, he said, is “a prescription for a mess, and to do worse.”
Yet Republicans say federal mandates haven’t worked, as Obamacare’s exchanges brace for yet another round of double-digit rate hikes in 2018.
“Get rid of the national definition of health care, put that back down to states,” Sen. Ron Johnson, Wisconsin Republican, said. “It hasn’t worked too well, consolidating all these decisions on health care in Washington, D.C.”
Copyright © 2017 The Washington Times, LLC.