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New Waivers for States Could Signal Flexible, Affordable Health Insurance Markets

On October 22, the Centers for Medicare & Medicaid Services (CMS) announced that states would be given authority to relax some of the guidelines for insurance under the Affordable Care Act (ACA). Framed as giving states “the flexibility to lower premiums and increase choices” for consumers, it’s also a weakening of ACA regulations that are designed to keep the insurance exchange healthy and premiums affordable. But it could spell innovation in states where ACA regulations have strangled the private market.

The new guidelines are called State Relief and Empowerment Waivers. To understand what these changes mean for the individual, it’s necessary to look at the fact sheet provided with the announcement. One change is that states will no longer be required to maintain a certain number of people insured by Obamacare plans when applying a new health insurance system under the waiver. Instead, states are allowed to provide other options to consumers, and these alternatives will compete for enrollment with ACA coverage.

A guarantee of coverage still exists under the Affordable Care Act, but some health analysts believe that populations may lose access to affordable health insurance, particularly if states move toward high-risk pools for people with chronic health problems. 

One theme that runs throughout the CMS statement is assurance of coverage for those with pre-existing conditions – it occurs three times in the text. However, there’s no mention of the concurrent authorization to raise rates for that coverage. The press release only mentions protecting those with pre-existing conditions and giving them access to the same level of care. 

Another worrisome change is the power given to states to decide who will get insurance subsidies. According to CNN, experts believe that older, sicker individuals or low-income citizens may actually end up with fewer choices as short-term plans lure young, healthy people away from the ACA marketplace. It should be noted, though, that enrollment in short term plans has been historically low compared with full major medical benefits. Some analysts believe that the Trump administration’s bolstering of short term plans will have minimal impact on the private market.

The new guidelines also put the emphasis on providing access to healthcare coverage to as many people as possible instead of covering as many people as possible. States will now have the flexibility to design alternatives to the ACA, consider improvements and implement new models. The goal with these initiatives would be to increase health insurance coverage by facilitating “competitive private coverage.”

Rules are being relaxed in order to give consumers more choice and better options for meeting individual needs, not to mention tightening federal spending on healthcare. 

The impact of these changes won’t be felt immediately, and 2019 open enrollment won’t be affected. Depending on the number of states applying for waivers and their specifications, changes could start happening by early 2020.

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