States answer HHS' call for waiver proposals aimed at shoring up insurance marketplaces

The Department of Health and Human Services has encouraged states to use Section 1332 waivers to design systems like state-operated reinsurance programs or high-risk pools.

While several states have answered the Trump administration’s call to apply for waivers to remake their Medicaid programs, others are seeking them for a different purpose: stabilizing their individual marketplaces.

Earlier this year, the Department of Health and Human Services sent a letter to state leaders that encouraged them to use state innovation waivers—also known as Section 1332 waivers—to design systems like state-operated reinsurance programs or high-risk pools.

“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,” HHS Secretary Tom Price said, citing Alaska’s reinsurance program as a prime example.

The federal government later approved Alaska’s application for a waiver that will allow it to extend its reinsurance program, which the state credits for rescuing its struggling individual insurance marketplace.

RELATED: Amid debate over ACA, Alaska offers unique case study

Oklahoma, Oregon, Minnesota and Iowa have also applied for waivers in a bid to shore up their exchanges and reduce premiums, Politico reported. Officials in New Hampshire and Maine are mulling taking similar steps.

HHS’ openness to helping states strengthen their marketplaces may seem to fly in the face of its anti-Affordable Care Act stance. After all, the Trump administration has refused to commit to maintaining another key lever to stabilize the marketplaces—cost-sharing reduction payments.

But some experts told Politico that the administration’s position on waivers is a sign that in some cases, it’s willing to set aside politics for practicality.

“I think it is a recognition by many Republican policymakers … that some market stabilization programs can be a good thing,” said the Center for Budget and Policy Priorities’ Aviva Aron-Dine, who was a top HHS official under the Obama administration.

However, not everyone is happy with the idea. Sen. Ted Cruz, R-Texas, who has emerged as a leading figure in the GOP’s push to repeal the ACA, said he doesn’t support stabilization funding “as a standalone.” Instead, he believes it should be just one component of a broader solution that includes repealing the current healthcare law.

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