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Coalition Supports State Flexibility Rules 
The Centers for Medicare & Medicaid Services (CMS) has taken steps to increase states’ ability to reform their individual and small group health insurance markets, and a coalition of health policy experts has provided comments supporting a proposed rule that would codify the agency’s more flexible guidance.
 
Section 1332 of the Affordable Care Act permits the secretaries of Health and Human Services and Treasury to approve a state’s proposal to waive specific provisions of the ACA provided the proposal meets certain requirements. Guidance from the Obama administration was highly restrictive and discouraged states from applying for 1332 waivers. 
 
In 2018, the Trump administration revised the previous administration’s restrictive guidance and expanded states’ ability to obtain “State Relief and Empowerment Waivers” by providing a more flexible interpretation of the statutory guardrails, making it easier for states to develop programs to reform their individual and small group markets. 
 
Twenty-two health policy experts submitted a comment letter on December 29, 2020, regarding CMS’ proposed 2022 Notice of Benefit and Payment Parameters in which CMS proposes to codify the more flexible Section 1332 guidance that it released in 2018. 
 
There are several reasons to support codification of the 2018 guidance:
  • The 2018 guidance is far superior to the Obama administration’s restrictive 2015 guidance that actually tightened the guardrails and precluded states from doing anything innovative under 1332. 
     
  • States that have received 1332 waivers have experienced success. Fifteen states received 1332 waivers during the course of the Trump administration. All have had positive results in lowering premiums and expanding coverage.
     
  • States exploring 1332 waivers need to make the decision about whether to devote the time and resources to the application process, and it would be helpful for them to have more regulatory certainty.
     
  • If the 2018 guidance were to be codified, a future administration would need to make further changes through notice and comment rulemaking, which would include a role for states to have their voices heard.


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