Abstract

Section 1332 of the Affordable Care Act (ACA) establishes state innovation waivers, which if approved allow states to waive certain ACA requirements, provided that insurance coverage remains comparable to the ACA with respect to affordability, benefit design, and enrollment, without increasing the federal deficit. The Trump administration has encouraged states to pursue these waivers, but the administration's haphazard approval process raises numerous questions about the malevolence and/or incompetence behind the administration's inconsistent behavior. The authors analyzed the thirteen 1332 waiver applications that states have submitted since January 2017, and they discuss the progress of states that are pursuing but have not submitted a 1332 waiver application and report on conversations with four states in the early stages of considering a 1332 waiver application. They found that most states are using or considering 1332 waivers to implement reinsurance programs rather than pursuing more sweeping reforms. Given evidence that such reinsurance programs both are more likely to gain federal approval and appear effective at stabilizing Health Insurance Marketplace premiums, we expect this trend to continue.