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Wednesday, October 31, 2018

Recently the Centers for Medicare and Medicaid Services (CMS) released new guidance for the Affordable Care Act’s section 1332 waivers, expanding the power of 1332s and allowing states to use the waivers to adjust traditional compliance with ACA requirements. The Administration has stated that these changes are an attempt to increase competition and choice in insurance markets. However, we are concerned that they could allow for the growth of inadequate and expensive alternative health care plans.

What is a 1332 Waiver?

1332 waivers, created by the ACA, are also called state innovation waivers. They were originally created to give states the authority to develop and implement their own alternatives to traditional health insurance programs, with the caveat that plans still had to offer comprehensive coverage and remain compliant to ACA regulations, including requiring coverage for essential health benefits, including emergency services, mental and behavioral health care, prescription drugs, and more, as well as ensuring protections for those with pre-existing conditions. The intent of these waivers was to give states the flexibility to design a health care program that fit the needs of their population.

What happens if these waivers are used?

The guidance released this month encourages states to use these waivers to establish insurance markets catered to their state, and no longer requires them to meet the traditional ACA patient protections. Comprehensive coverage must still be made available, but skimpier plans like the short-term, limited duration plans, will now count as adequate coverage. These short term plans theoretically count as coverage, but do not have to provide coverage for the essential health benefits, nor guarantee coverage or equal access for those with pre-existing conditions.

Additionally, the guidance indicates that CMS will allow states to use the cost-sharing reductions, funds from the federal government originally allocated to help beneficiaries afford the premiums for ACA compliant plans, to help consumers pay for short-term plans instead.

Ultimately, the guidance encourages states to use the waiver authority to increase access to short-term, limited duration health plans. These types of plans are bad for cancer patients and survivors because they:

  • Are able to exclude consumers based on pre-existing conditions
  • Can retroactively cancel policies and refuse to pay for care for a person with a condition that was not disclosed at the time of purchase, even if the individual did not know they had it or had not been previously diagnosed
  • Can charge higher premiums to older or less healthy people without limit
  • Undermine the insurance marketplace as they draw healthier people away and make comprehensive coverage more expensive for those with higher cost healthcare needs, or who are excluded from STLDs

Waiving ACA compliance requirements provides states with the flexibility to decrease protections for vulnerable patients, such as those with cancer and other pre-existing conditions, as well undermines the importance of overall comprehensive coverage, even for those who are healthy. Participation in this waiver could pose increased challenges for cancer patients in search of affordable and adequate coverage options, and increase the risk to those who enroll in these plans and find themselves facing a cancer diagnosis and therefore serious challenges with health care coverage.

What can you do next?

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