CMS Tool Helps States Opt Out of ACA Mandates


CMS seeks to aid states in creation of high-risk pools and state-operated reinsurance programs.

The Centers for Medicare & Medicaid Service (CMS) recently launched a tool to assist states seeking waivers to opt out of certain Affordable Care Act (ACA) mandates.

The tool is intended to aid states wishing to complete waiver applications to create high-risk pools or state-operated reinsurance programs, according to a press release. The Section 1322 waivers are generally used for states to opt out of ACA provisions.

The CMS is providing guidance to states that are pursuing solutions that reduce costs and increase insurance coverage, especially among those facing high premiums due to reduced competition, according to the release. In addition to substantial premium increases, numerous insurers have chosen to leave some or all marketplaces.

For 2017, premiums on have increased by an average of 25%, with some states rising much higher. In Arizona, premiums rose more than 100% in 2017. Additionally, one-third of counties only have 1 insurer selling plans, while 2 insurers in Iowa announced their withdrawal, which may result in no insurers participating in 2018, the CMS reported.

Each state has a unique situation that affects their health insurance exchange and insurance market. For example, 2017 premiums were initially set to rise 40% in Alaska, but the state implemented a reinsurance program to offset the costs, according to the CMS. This action helped steady premiums.

Alaska is now requesting a 1332 State Innovation Waiver to extend the program. This waiver is required to be budget neutral, so it does not increase taxpayer obligation. If Alaska’s waiver application is approved, the state would receive federal funding to reduce costs.

Earlier this year, US Health and Human Services Secretary (HHS) Tom Price sent a letter to states encouraging them to engage in similar programs to stabilize their health insurance markets.

In the


, the HHS announced a partnership with the Department of Treasury to improve healthcare innovation by giving states increased flexibility. Under the ACA, states may apply the waiver to pursue new strategies to provide residents with affordable high quality insurance.

The departments are promoting the waivers to increase the uptake of strategies that suit their states’ individualized needs. Through original thinking customized for each state, consumers can benefit from lower premiums, improved market stability, and improved customer choice, the HHS wrote.

“Today’s guidance addresses the ACA’s impact in driving up insurance costs and reducing choices,” said CMS Administrator Seema Verma. “State initiated waivers that implement high-risk pool/ state-operated reinsurance programs will help lower premiums, stabilize the health insurance exchange, and meet the unique needs of each state.”

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