Presidential Administration Takes New Steps to Support Innovation, Empower States in Health Care

Building on President Obama’s commitment to ensure states have the power and flexibility to innovate and implement the health care solutions that work best for them, on Friday, March 11, the Departments of Health and Human Services (HHS) and Treasury proposed new rules outlining the steps states may pursue in order to receive a State Innovation Waiver under the Affordable Care Act.

The Affordable Care Act gives states the flexibility to receive a State Innovation Waiver so they may pursue their own innovative strategies to ensure their residents have access to high quality, affordable health insurance.В  Under the law, State Innovation Waivers are available in 2017. President Obama supports bipartisan legislation that would make waivers available to states beginning in 2014.

“Innovation Waivers empower states to take the lead on implementing the Affordable Care Act,” said HHS Secretary Kathleen Sebelius.  “Today’s announcement demonstrates the flexibility available to states as they continue to move forward on fixing our broken health insurance marketplace.”

State Innovation Waivers are designed to allow states to implement policies that differ from those in the Affordable Care Act so long as they:

  • Provide coverage that is at least as comprehensive as the coverage offered through Health Insurance Exchanges – new competitive, private health insurance marketplaces.
  • Make coverage at least as affordable as it would have been through the Exchanges.
  • Provide coverage to at least as many residents as otherwise would have been covered under the Affordable Care Act.
  • Do not increase the federal deficit.

Under the Affordable Care Act, states have significant flexibility in implementing the law, from how they design Exchanges to cracking down on the worst of insurance company abuses.В  They also have new resources to improve and lower costs in their Medicaid programs.В  For example, if states choose to operate their own Exchange, they are eligible for grants to help design them and determine the rules, including whether to allow all companies to offer insurance in the Exchange or to select only plans that improve the quality and affordability of the choices.В  To read more about new resources and flexibilities for states under the Affordable Care Act, visit www.HealthCare.gov/center/reports/states02252011a.pdf.

States could use a variety of strategies to innovate through a waiver, provided they meet the above requirements.В  For example, they could develop a new system for providing tax credits, which links small business tax credits to the tax credits for moderate-income families.В  Or they could change the benefit levels or add new benefit levels for health plans offered in the Exchanges, providing consumers and employers even more choices.

The proposed regulation announced today describes the content of the waiver application and how such proposals may be disclosed to the public, monitored, and evaluated.В  The administration welcomes suggestions for improving this process from states, patients, health care providers, and the general public.В  As the President said in his State of the Union address, he is open to ideas on how to improve the Affordable Care Act.

For more information on the regulations announced today, visit www.HealthCare.gov/news/factsheets/stateinnovation03102011a.html.В  To read the new regulations, visit www.ofr.gov/inspection.aspx.

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