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Daschle and Gingrich on Ways to Improve Health Insurance Coverage through State Flexibility

Thursday, December 10, 2015

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Washington, D.C. – Today, the Bipartisan Policy Center (BPC) released a new report, by former Senate Majority Leader Tom Daschle and former House Speaker Newt Gingrich, which offers recommendations to federal policymakers on the implementation of state innovation waivers (Section 1332 of the Affordable Care Act). This option could give states more flexibility in how they provide access to health insurance coverage for their residents.

Understanding the current political discord between Democrats and Republicans over repeal of the Affordable Care Act (ACA), BPC leaders Daschle and Gingrich believe there is great opportunity for bipartisan support for reform at the agency level, particularly as states explore ways to seek waivers from parts of the law beginning next year.

In the report, Improving and Expanding Health Insurance Coverage through state Flexibility, Daschle and Gingrich agree on several principals, including the importance of: (1) expanding coverage to the uninsured; (2) reducing health care costs; and (3) improving the quality of health care delivery. They call on federal and state policymakers to identify opportunities to maintain and expand coverage, streamline the process, and provide increased choice to families and individuals through increased state flexibility.

BPC recommendations:

  • Encourage secretaries of Health and Human Services (HHS) and Treasury to work closely with governors to define reasonable interpretations of Section 1332 requirements. Secretaries should issue or revise regulations based on those convenings.
  • Federal officials should consider the federal deficit neutrality requirement and calculate the budget across all waived programs, rather than program by program, and over the term of the waiver, rather than annual basis.
  • The HHS Secretary should implement Section 1333 of the ACA, which directs the National Association of Insurance Commissioners (NAIC) to develop model insurance market standards that can be adopted by states so they can sell health insurance across state lines.
  • Congress should fix the “family glitch” and fully offset the cost at the federal level.

“This report offers recommendations on an important provision of the ACA – one that recognizes the need for state flexibility,” said former Senate Majority Leader Tom Daschle. “At the same time, the recommendations urge policymakers to resolve a technical issue, the ‘family glitch,’ which prevents dependents, including children, from having access to affordable insurance coverage. Giving states the flexibility to test new ideas and alternatives can provide important lessons for making health insurance more accessible and affordable.”

“State flexibility is key to finding healthcare solutions that actually meet the needs of individual patients and doctors in their own communities instead of a top down Washington-first solution,” said former House Speaker Newt Gingrich. “If states are more empowered to seek out innovative solutions, it will save money and lives over time as affordability, access and quality improve as states experiment, tweak, and re-design their systems with their own citizens in mind. This policy will also improve consumer choice and competition in insurance markets so states can sell insurance across state lines. It should also ensure that state insurance commissioners have the ability to enforce regulations and contracts between carriers, employers, and plan enrollees in their states.”

Currently, at least 22 state legislatures have considered permitting the sale of insurance across state boundaries to increase competition and coverage options, but only six have enacted legislation. Those states include Rhode Island, Washington, Wyoming (prior to passage of ACA), Georgia, Kentucky, and Maine.

The report also discusses the opportunities for state flexibility combining the authority provided in Section 1332 with Section 1115 of the Social Security Act (SSA) or models tested through the Center for Medicare and Medicaid Innovation (CMMI) (Section 1115A of SSA). Section 1115 has become a means of permitting states that chose not to expand Medicaid under the ACA to provide coverage to certain low-income populations.

“If implemented, these recommendations would give states the flexibility they need to design health insurance coverage in a way that provides meaningful, affordable health insurance coverage while recognizing the significant variation in state and local markets,” said Katherine Hayes, BPC health policy director.