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States slow to use ACA reinvention provision

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As recently as May, federal regulators had not done much to figure out what they will do with applications from states that want to revamp their Affordable Care Act rules and programs.

Officials at the U.S. Government Accountability Office talk about the regulators’ early efforts to process ACA Section 1332 waiver applications in a report prepared at the request of Sen. Orrin Hatch (R-Utah).

Drafters of the Patient Protection and Affordable Care Act of 2010 and its sister bill, the Health Care and Education Reconciliation Act of 2010, included Section 1332 in the law to give states a chance to revamp their ACA exchanges and ACA-shaped commercial health market rules in 2017.

The U.S. Department of Health and Human Services and the U.S. Treasury Department set tight limits on what a state can do with a Section 1332 waiver proposal. Officials decided, for example, that a waiver proposal had to leave a state’s people with at least as much access to health coverage as they had before and could not lead to any discrimination against people with expensive health problems.

Related: PPACA revamp provision: Feds emphasize limits

In May, when the GAO completed its research, Vermont was the only state that had filed a Section 1332 waiver proposal, and Hawaii was the state that seemed to be closest to completing another proposal, Katherine Iritani, a GAO director, writes in a summary of the GAO officials’ findings.

Managers of Covered California, California’s state-based ACA public exchange, recently posted a draft of a Section 1332 waiver proposal that would let the exchange sell health coverage to people who are living in the United States without documents showing they are in the country legally.

In May, neither HHS and nor the Treasury had developed procedures for working together to review the proposals, or a standard schedule for reviewing the proposals, Iritani says.  


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