By Joe Touschner

In a continued push to show that states have flexibility under the Affordable Care Act, the Departments of Health and Human Services and the Treasury this week proposed rules for states to apply for innovation waivers under section 1332 of the ACA.  Under current law, states could negotiate a waiver of ACA provisions (like the requirement to operate health insurance exchanges) beginning in 2017, but the Administration and some Senators have supported moving the date up to 2014.  States would have to ensure that the benefits would be comparable to those provided by ACA and could not increase the federal deficit.  It remains unclear whether Congress will act on this acceleration of the date.

The proposed rules reiterate what President Obama explained in a speech to governors:  States seeking waivers will have to show that their plans would provide coverage as comprehensive and to as many people as would be provided without a waiver.  States with waivers would be able to access the federal funding that would otherwise flow to individuals as tax credits under ACA.   States will have to provide actuarial and economic analyses to support their proposals and provide opportunities for public input.

Whenever the state innovation waivers become effective, it’s important to remember that states possess a variety of waiver authorities relating to health coverage programs.  (They’re usually named after the section of the Social Security Act that describes them.)  Here’s a quick overview:

• Section 1915 gives states authority to seek waivers of many provisions of Medicaid law, often used for providing managed care or home and community based services. 
• Section 1115 allows states to engage in research and demonstration projects that are “likely to assist in promoting the objectives” of the Medicaid program. Its even possible for states to request waivers from Medicare law. 
• Section 1332 authority, the subject of the proposed rules, applies to a range of requirements in the ACA. 

While each waiver category is different, the proposed rules also allow states to combine Section 1332 waiver applications with others they may want to pursue at the same time.  A state will be able to use a single application to propose waivers under these different authorities.  States will still have to meet the requirements of each section, but all the waivers–and their combined effect on health coverage–will be considered together.