Obama Signals Flexibility on Start Date for State Health Innovation Waivers

Speaking before the National Governors Association on Monday, President Obama endorsed legislation introduced earlier this month that would speed up the ability of states to forgo certain Affordable Care Act requirements if they were to create viable alternatives. The Empowering States to Innovate Act (S. 248, H.R. 844) introduced by Senators Ron Wyden (D-OR), Scott Brown (R-MA), and Mary Landrieu (D-LA) in the Senate and by Rep. Peter Welch (D-VT) in the House would move the start date of the health care reform law’s state innovation wavier program from 2017 to 2014. Under this program, states would be permitted to implement policies that differ from those contained in the Affordable Care Act so long as the alternate health care delivery system would provide the same level of quality and affordability demanded by the law and would cover the same number of people without increasing the federal deficit. These state innovation waivers would be valid for up to five years with the option of renewal.

Speaking in favor of this measure, Obama said that it was:

a reasonable proposal. I support it. It will give you flexibility more quickly, while still guaranteeing the American people reform. If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act does – without increasing the deficit – you can implement that plan. And we’ll work with you to do it. I’ve said before, I don’t believe that any single party has a monopoly on good ideas. And I will go to bat for whatever works, no matter who or where it comes from.

According to a fact sheet issued by the White House, potential state-based proposals that could qualify for the waiver program include:

• A streamlined system that links tax credits for small businesses with tax credits for low-income families.
• Alternatives to the individual responsibility provision – such as automatically enrolling individuals in health plans – that achieve similar outcomes.
• Alternative health plan options to increase competition and provide consumers with additional choices.
• An increase in the number of benefit levels to provide more choices for individuals and small businesses.
• Immediately allowing large businesses interested in doing so to purchase health insurance through the new private marketplace, the State-based health insurance Exchange.

The alternate programs would still be required to maintain the consumer protections established by the Affordable Care Act, including the ban on preexisting condition exclusions, extension of dependent coverage to age 26, and medical loss ratio requirements.

The endorsement of the bi-partisan bill speeding up the innovation wavier program is the second significant change to the health care law President Obama has supported in recent months. During his State of the Union Address, Obama spoke in favor of repealing the contentious provision expanding the 1099 reporting requirements for purchases of goods or services of $600 or more.

This entry was written by Ilyse Schuman.