What They’re Thinking: Stopgap, guardrails and the ‘spirit of the waiver’

Sept. 09--The Iowa Insurance Division still is waiting to hear if the federal government will approve a proposed stopgap measure that would set up reinsurance as well as offer both age and income based tax credits. Brad Wright is a professor of health policy at the University of Iowa College of Public Health.

Q. Can you explain to people who haven't been keeping up what the stopgap measure is proposing?

A. The reason behind the waiver is because Iowa was facing the prospect of having no insurers offering coverage on the state marketplace. That obviously is not good, and the state is scrambling to try and find solution to that.

They actually refer to it as emergency regulatory relief to underscore that.

The 1332 waiver is a provision of the Affordable Care Act. Effectively what that provision is designed to do is to say, under the federal system of government, we will give states option of doing things their own way provided they still meet objectives of ACA.

Those are offering coverage that is comprehensive, affordable and covers as many people as the ACA would and to not increase the federal deficit.

What Iowa is doing is a bit of a liberal approach to this. Liberal in terms on how it's interpreting what it can do under the waiver. The plan is to offer a single plan -- a silver level plan.

The subsidy money that would come to the state to help them run this program would still be given out as tax credits, but they would be expanded to go above 400 percent of the poverty level.

This is more generous than the ACA, ... but it could make insurance more expensive for lower income individuals than what they'd pay under the ACA. Q. Some have said the waiver is asking to do a lot more than that. What do you think?

A. That's the whole idea of guardrails -- the spirit of the waiver. If states can accomplish what the ACA can accomplish and come up with their own way to do it that they like better, then they should be allowed to do that.

The government put those guardrails in place so that states couldn't propose to do things that undermine the ACA and what it's supposed to do.

The Iowa waiver proposes 12 months of continuous coverage, which is more conservative than the ACA. Tax credits will help high-income individuals, but it seems like that's going to make things less affordable for low income individuals.

Essential health benefits, that seems fine, they've met that as far as I can tell.

That said, you could play it backward and say if you compare that coverage with the ACA that has no plans in the marketplace and the coverage is zero. You can argue it either way ...

There haven't been too many state to go this route -- Oklahoma is one. But how the administration determines in Iowa's favor or not could essentially open up the flood gates.

You might see a lot of other states, especially conservative ones, do things they've been wanting to do and feel this gives them broad leeway to redesign things and not comply with the ACA.

Q. So if the stopgap is approved, do you think it could undermine the ACA?

A. That's the big worry. If you can meet the objectives of the ACA, but in a different way -- think about it like driving directions: You open your GPS and it gives you three different routes. If you can take any of those and end up in the same place by different means, that's OK.

But you take the guardrails out of the equation, then you're not ending up in the same place and you're ending up in a different location than intended.

So with health care, you're not covering as many people, or the benefits are not as good or as coverage is not as affordable.

l Comments: (319) 398-8331; [email protected]

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