By Joan Alker and Sabrina Corlette

Discussion of new “superwaiver” authority is a hot topic in many state and health policy circles. Recently at a conference of state health officials sponsored by the National Governors Association, several states mentioned their interest in the Affordable Care Act’s (ACA) so-called Section 1332 waivers.

This provision of the law allows states to modify key provisions in the ACA in order to design alternative approaches to expanding health coverage, beginning in 2017 – but perhaps not to make as many changes as some believe. These alternative approaches could be extensive, including waivers of the ACA’s benefit mandates, insurance exchanges, and individual and employer mandates, or they could be relatively modest.

It is worth noting that the new waiver authority does not provide a new path to seek changes to federal rules regarding the Medicaid and Children’s Health Insurance Program (CHIP) – states must continue to seek Section 1115 waiver authority here – but they could submit one joint application that aligns a 1332 waiver with an 1115 waiver. As close observers of the intense debate in the state of Arkansas over the future of the state’s “private option” Medicaid expansion are aware, a newly formed commission is contemplating a Section 1332 waiver for the future there.

Many questions arise as to how this new authority will be contemplated and used by states, and the federal government will need to issue more guidance in this regard. The law lays down some guardrails for states, including requirements that the state 1332 waiver will:

• Provide coverage at least as comprehensive as that provided under the ACA;
• Provide coverage and cost-sharing protections that are at least as affordable as those provided under the ACA;
• Provide coverage to at least a comparable number of residents as that provided under the ACA; and
• Not increase the federal deficit – or in the parlance of veteran Section 1115 waivers – budget neutrality will be required.

A recent issue brief jointly published by the Robert Wood Johnson Foundation and the Commonwealth Fund lays out options for states considering applying for a 1332 waiver. Another issue brief worth examining by our colleagues at the Center on Budget and Policy Priorities highlights important policy considerations as states think about this new option.

The states at the NGA conference indicated that they would like to see further substantive guidance from the federal Departments of Health and Human Services (HHS) and Treasury. To date, HHS and Treasury have said little about what states can and cannot do under 1332 waivers, but they have published regulations outlining how states can go about applying. One question that awaits further clarification from the federal government is how differing public notice and comment rules which govern these new waivers and those that pertain to Section 1115 waivers will be applied in the case of a state seeking both through a single application.

A state pursuing a Section 1332 waiver must, “through its Web site or other effective means of communication,” provide a comprehensive description of its application, information on where copies of the application are available for public review, information on how and where to submit comments, and the location, date, and time of the state’s public hearings on the waiver application. The regulations require the state to hold at least two public hearings. Note, however, the state is not required to post the application itself. The regulations merely require them to post a “description” of the application.

Once an application is submitted and determined complete, the federal agencies responsible for review – HHS and Treasury – will also provide for a public comment period. In doing so, the rules require HHS to make the application available on its website, along with any supporting materials submitted by the state. Supporting materials are described to include economic and actuarial analyses, data, assumptions, a 10-year budget plan and other information needed for the Departments of HHS and Treasury to fully the assess the waiver.

So more to come on this issue, but if you start hearing discussion about a “superwaiver” in your state – chances are that someone is thinking about a Section 1332 waiver. Like Section 1115 waivers, critically important policy decisions can get made in the waiver context – so robust public participation in the process will most definitely be important to ensure the best possible outcomes for consumers.