Waiver updates

One of the things that has surprised me is that more states had not submitted 1332 waivers for their ACA markets by the end of February. The Center for Medicare and Medicaid Services (CMS) has, by law, up to 210 days to approve or deny a waiver. CMS intends to sign exchange contracts with insurers at the end of September so late February was the latest that a waiver could be submitted with at least 210 days before the contract signing date. Since I’m so much fun to travel with, I had thought that some states would submit waivers with sufficient time to allow for the entire window to be used.

I was wrong. No state submitted a new waiver application before March 1.

Since then, Wisconsin is preparing a straightforward reinsurance waiver. It has not gone through the entire state based public comment process yet but it is straightforward and should be approvable. CMS has shown that it is willing and able to approve reinsurance waivers fairly quickly once the documents arrive.

Maine is preparing a new invisible high cost risk pool waiver. They will fund the waiver with a $4 per member per month insurance tax for all group and individual market policies sold in Maine. Individuals and their families with 8 chronic conditions will be automatically put into a high cost reinsurance pool so that the selling insurer is never on the hook for more than $50,000 while insurers can cede premiums and risk for other individuals. There are a couple of small technical choices that have me scratching my head but this is a mechanically sound proposal that will lead to lower off-Exchange premiums. It should get approved fairly quickly.

Finally, Ohio submitted their waiver application today. The waiver asks that the individual mandate be waived for all of Ohio. Since the waiver penalty was zero-ed out starting in 2019, this has almost no pragmatic fiscal or coverage impact. It is a messaging waiver.

There is an interesting side note where the Ohio waiver could provide some useful evidence. How much of the efficacy of the waiver is purely derived from a rational cost-benefit analysis and how much of the waiver’s impact is due to the “taste for compliance” where people want to follow the rules? If the waiver is entirely a rational cost-benefit analysis, the Ohio waiver is functionally meaningless. If there is a taste for compliance, wiping a $0 waiver out could lead to lower enrollment. I lean towards thinking that a “taste for compliance” has some effect but this waiver could provide some stronger evidence.

Update 1 Maryland is getting their ducks in a row for a very large reinsurance waiver application.