Government Encourages States to Pursue Innovative Health Insurance Programs

States are encouraged to pursue insurance initiatives that increase affordablity.

The Department of Health and Human Services (HHS) recently announced a partnership with the Department of Treasury that would improve healthcare innovation by giving states increased flexibility.

Under the Affordable Care Act, states may apply for a State Innovation Waiver to pursue new strategies that provide individuals with high quality and affordable insurance, according to a press release from the HHS.

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, according to the release.

The departments are seeking to increase the utilization of the waivers due to the success of Alaska’s improvements in their insurance program.

Alaska has made substantial improvements to its insurance marketplace through the creation of a reinsurance program. In 2017, premiums for individual health insurance were estimated to increase more than 40%. To offset the significant increases, Alaska created a reinsurance program to stabilize premiums prior to Open Enrollment 2017.

Due to its success, Alaska is now requesting a state innovation waiver to permit the program to receive funding based on the savings to the government from lower tax credits and continue the program, according to the release. The request is currently being reviewed by the HHS and the Department of Treasury.

If approved, the state may be able to receive funding to mitigate a portion of costs for the high-risk pool/reinsurance and other programs, while lowering costs for customers.

The departments are encouraging the opportunity to work with states on the innovation waivers, and invite states to seek approval for innovative programs, according to the HHS.

“States need the flexibility to develop innovative healthcare models that will improve patient access to care, increase affordability and choices offered, lower premiums, and improve market stability,” said Health and Human Services Secretary Tom Price, MD. “Today’s letter highlights State Innovation Waivers as opportunities for states to modify existing laws or create something entirely new to meet the unique needs of their communities.”