New Guidance to Allow States Flexibility to Lower Premiums and Increase Choices for Health Insurance Markets

October 2018 ~

CMS and the U.S. Department of the Treasury have issued new guidance that will grant states more flexibility to design alternatives to the Affordable Care Act (ACA), increase health coverage options, as well as the option to apply for waivers toward improve state insurance markets.

The new guidance has been designed to allow states to move their insurance markets away from the one-size-fits-all rules and regulations imposed by the ACA and increase choice and competition within their insurance markets. According to CMS, under this new policy, states will be able to pursue waivers to improve their insurance markets, increase affordable coverage options for their residents, and ensure that people with pre-existing conditions are protected. These waivers are called State Relief and Empowerment Waivers to reflect this new direction and opportunity.

Under the new guidance, states will be able to develop innovative approaches that break away from the otherwise inflexible federal approach and increase consumer control and expand choice and competition in their markets. In addition to this guidance, CMS is also preparing to release waiver concepts to help spur conversations and ideas with states, and illustrate how states might take advantage of this new opportunity to move beyond the ACA.

According to CMS, the updated guidance marks a new direction that delivers the flexibility the law always intended for states. The document outlines five principles for states to follow as they work to develop innovative new approaches. Moving forward, the agency says state waivers should aim to:

1. provide increased access to affordable private market coverage;
2. encourage sustainable spending growth;
3. foster state innovation;
4. support and empower those in need; and
5. promote consumer-driven healthcare.

New flexibilities available to states include:

• Allows states to provide consumers with plan options that best meet their needs, while, at the same time, ensuring people, including those with pre-existing conditions, retain access to the same level of coverage available today without the waiver;
• Continues to require that a comparable number of people have coverage, but expands the definition of coverage to include more types of coverage, such as short-term plans;
• Provides greater flexibility for states to consider improvements in comprehensiveness and affordability for state residents as a whole versus the prior focus on specific populations;
• Supports increased variation and flexibility for states that may want to leverage components of the Federal Exchange platform to implement new models; and
• Provides flexibility for states to meet the state legislative authority requirement. The guidance clarifies that in certain circumstances, existing state legislation that provides statutory authority to enforce ACA provisions and the state plan, combined with a duly-enacted state regulation or executive order, may satisfy the requirement that the state enact a law.

For more information, see the CMS Fact Sheet and the State Relief and Empowerment Waivers guidance on the Federal Register.

Source(s): CMS Press Release;