Understanding the Affordable Care Act’s State Innovation (“1332”) Waivers
By Jessica Schubel and Sarah Lueck
Center on Budget and Policy Priorities, February 7, 2015
Considerable uncertainty surrounds the potential scope of the “waivers for state innovation” authorized under the Affordable Care Act (ACA), which allow states to modify how they implement key elements of health reform beginning in 2017. Also known as “1332 waivers” for the section of the ACA creating them, the waivers are attracting attention as a way states may pursue their own approaches to expand coverage, including alternatives that would represent a significant departure from the ACA’s standards and requirements.
Many aspects of the ACA, however, cannot be waived. Moreover, the ACA establishes several conditions that states must satisfy if they diverge from ACA standards and requirements. These conditions ensure that states using the ACA’s waiver authority continue to meet the overarching goals of health reform, such as extending access to affordable health coverage that provides a basic level of benefits.
In addition, section 1332 waiver authority doesn’t extend to Medicaid or the Children’s Health Insurance Program (CHIP). If a state wants to change these programs at the same time that it changes how it implements health reform, it can simultaneously request approval of a Medicaid or CHIP demonstration project under section 1115 of the Social Security Act. Section 1332 waivers aren’t themselves “super waivers” that give states sweeping new authority over Medicaid or CHIP (or Medicare), as some have suggested.
This paper describes key elements of 1332 waivers, how states may use them, what conditions states must satisfy to receive federal approval, and how they interact with existing waiver authority related to other federal health programs.
By Don McCanne, MD
“Forget about our gridlocked Congress. We’ll get an ACA waiver and enact our own state-level single payer system, just like Saskatchewan did in Canada.” Great idea. The problem is that the Sec. 1332 waivers authorized in the Affordable Care Act are extremely limited in their scope. This very helpful article from CBPP explains the uses and limitations of the Sec. 1332 waivers.
Although the limitations are disappointing, single payer activists should vigorously proceed on two fronts. While Congress remains non-receptive to legislation moving us toward single payer, efforts should continue on a state level to enact whatever single payer policies are possible. That not only would make the eventual transition to a single payer system smoother, but it would also improve access and affordability for those who need relief now.
The more important front is to immediately step up advocacy for federal legislation, using John Conyers’ H.R. 676 – the Expanded and Improved Medicare for All Act – in educating the public as to reform that would really work. Although the Republican-controlled 114th Congress is preoccupied with responding to the Affordable Care Act and will not advance a single payer bill, nevertheless it is essential that we use this time to educate, form coalitions, educate, initiate grassroots efforts, and educate. As people discover how severe the deficiencies in our current system are, they will want to hear about a system that does not take away their choices while exposing them to financial hardship.
So understand the limitations of Sec. 1332 waivers as you continue your advocacy for state reform, but, by all means, simultaneously intensify your efforts for federal legislation that will enable not only your state, but all states, to ensure that everyone in the nation will have access to all essential health care services, free of financial barriers.