OH – State Developing 1332 Innovation Waiver
July 2017 ~
The Ohio insurance commissioner, on June 12, submitted a request for a 1332 waiver that will exempt Ohio from the individual and employer mandates established under the Affordable Care Act (ACA).
Ohio’s motivation to get out of the individual and employer mandates originally came to light in 2015, during a case concerning the operation of state and federal insurance exchanges/marketplaces where the U.S. Supreme Court had not yet ruled that individuals had the right to get federal tax credits to reduce the cost of their health insurance.
State lawmakers at the time said they feared the Supreme Court would rule in a way that upset insurance markets and the personal obligations of Ohioans, stating that if the court rejected the use of subsidies, individuals could still be required to buy insurance because of the ACA mandates.
“The sands were still shifting” on how the ACA would play out, said state Senator Dave Burke, chairman of an Ohio Senate committee on health care. “We were trying to do a work-around at the time,” thus prompting the committee’s decision to include language in the state’s budget bill that would require the state to apply for a 1332 waiver.
“The impacts of the law have increased premiums in Ohio and over the last two years, it has become more difficult for consumers to buy insurance as carriers have left the market in Ohio,” said Christopher Brock, spokesman for the Ohio Department of Insurance. “The waiver process is designed to identify solutions – especially those that may become available as Congress makes changes to current law and as the new the administration has promised more flexibility when it comes to innovation waivers.”
Under the ACA, states cannot get federal permission to drop ACA foundations. Each must propose detailed and innovative alternatives that don’t reduce insurance coverage and protections for their residents, including protecting other ACA cornerstones such as those requiring a broad suite of health care benefits provided by all insurers to all customers, and safeguards against age and health discrimination when insurers set their premium prices.
The language in the 2015 Ohio budget in 2015 (covering fiscal years 2016 and 2017) was intended to launch work on a waiver request with the understanding that an actual request would not be submitted until early 2017. In a new budget finalized last month, state lawmakers renewed the waiver language with a January 31, 2018, deadline.
As stated in the guidance from CMS, states can apply for Section 1332 waivers “to pursue innovative strategies for providing their residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA.” The Ohio Department of Insurance (DOI) has posted a request for proposals for actuarial consultants in June to help the state create a feasible alternative, and is now sorting through the proposals.