New York Estate Planning & Elder Law Blog
The White House recently issued new guidelines to states on acceptable alternative health care plans allowed under the Affordable Healthcare Act (ACA) that will allow states to apply for waivers and help shore up health care exchanges. Until now, such waivers were granted with so-called “guardrails” to ensure the waivers met at least the same coverage level as under the ACA.
By contrast, the new guidances issued by the White House allow states to loosen old guardrail requirements and allow healthcare plans that do not meet the coverage standards required under current federal law, including charging higher premiums for people with pre-existing conditions. The change in policy is a victory for states with conservative legislatures which were unable to gain such waivers under the previous administration because the suggested plans did not meet federal requirements.
“States know much better than the federal government how their markets work. With today’s announcement, we are making sure that they have the ability to adopt innovative strategies to reduce costs for Americans, while providing higher quality options,” Centers for Medicare and Medicaid Administrator Seema Verma said in a statement.
As a result of the new executive guidances, states may be able to set up new health care exchanges allowing insurance companies to sell plans with much less comprehensive coverage but also charge smaller premiums. On the other hand, critics argue that such moves could end up creating parallel health care exchanges, attracting younger people who may not need comprehensive coverage, that would endanger health care exchanges set up under the ACA.
With younger, healthier people buying into these parallel healthcare exchanges, only those who need coverage plans that allow for pre-existing conditions will be left to enroll in ACA plans which could face skyrocketing premiums. However, previous ACA waivers have been granted on a bipartisan basis to allow states to improve healthcare markets at times where some individuals were struggling with access to coverage at rates they could afford.
“The bottom line is the previous guidance just didn’t allow any creativity. We’ve only granted eight waivers, and seven are exactly the same type,” Verma said. “States were coming to us with all kinds of creative ideas, but the guidance was too restrictive and thwarted innovation.” Verma went on to emphasize that the new waivers will not affect individuals with preexisting conditions but rather will give more individuals additional health coverage options.