Referees, CMS and 1332’s

Good referees are consistent referees. They make the same type of call on both ends of the field in the first minute of the game and the last minute of the game. They are usually consistent across games at the same level and style. They may differ across referees. My favorite soccer referee to run a line for is a USSF National. He conducts a ninety minute group therapy session for players and will call shirt grabs tight all year long. Another USSF National referee, that I frequently worked with, won’t call a foul unless there is a compound fracture poking through the shin. Both styles work in facilitating competitive games. The teams know who is in the middle and within the first couple of minutes, the teams can figure out what the referee will and won’t call for the rest of the game.

The Center for Medicare and Medicaid Services (CMS) seems like it is a good referee. They are consistent with how they are reading 1332 rules. They are reading them very tightly, but their read is the same for Minnesota as it is for Iowa. CMS is reading budget neutrality real tight. In their response to Iowa’s question on what what be considered for budget neutrality, CMS responded:

If the Departments were to pass the entire premium tax credit savings through to lowa, the waiver likely would increase the Federal deficit. This is because several .orponrnìs of the State’s proposed plan would reduce Federal revenues or increase Federal costs. First, any increase in the number of insured persons may reduce individual shared responsibility payments for failure to maintain health coverage due under Intemal Revenue Code (lRC¡ sectión SOOOa

Covering more people and thus having more people not pay the individual mandate penalty is a budget neutrality hit as called by the CMS referees. They made a similar call on Section 1331 Basic Health Plan funding so they are being consistent. CMS outlined several other areas of cost that would diminish the size of the pass through Iowa wanted.

Iowa is pulling its waiver application.

Breaking: Iowa is withdrawing its 1332 waiver request to opt out of Obamacare marketplace, blaming the law for “inflexible” requirements

— Abby Goodnough (@abbygoodnough) October 23, 2017

I can’t blame them. Their initial waiver was legally shaky on coverage grounds. The modified waiver could lead to a plausible hold-harmless argument if one squinted hard enough. Now that they aren’t getting the cash that they thought they would have gotten, it is not worth going forward.

The most important thing in my mind from the Iowa and Minnesota waiver processes have been the learning that other states have achieved. The rest of the country now has a pretty good idea of what type of referee CMS will be. They have seen the easy calls (reinsurance waivers in Oregon and Alaska) and a pair of strong judgement calls on funding. States know what will draw a whistle and what they can get away with now, so they should not be surprised when they file new waivers.