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Stephanie Pellitt

, National Council for Behavioral Health

Trump Administration Loosens Requirements for ACA 1332 Waivers

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The Trump Administration has issued new guidance to states that would relax requirements around 1332 waivers, the Affordable Care Act’s (ACA) vehicle for states to make changes to their individual insurance markets. The guidance tracks closely with the Administration’s stated goal of providing flexibility for states to offer cheaper insurance options outside of the ACA marketplaces. In short, the new guidance encourages states to utilize association health plans (AHPs) and short-term health plans as alternatives to current ACA marketplace plans.

SUMMARY OF NEW GUIDANCE

The framework for waiver approvals outlined in the guidance — which the Administration has dubbed “State Relief and Empowerment Waivers” — reflects a standard that as long as Affordable Care Act (ACA)-compliant coverage is available for those who want it, states can encourage less comprehensive coverage options alongside it. By counting AHPs and short-term health plans towards the tally of insured individuals, the Trump Administration is encouraging states to pursue these alternatives that skirt the ACA’s consumer protections. The guidance also circumvents the requirement that states must pass legislation to enact waivers, reverses a requirement that waivers may not harm specific sub-populations, and could make it more difficult for states to advance single payer or Medicaid buy-in proposals.

IMPACT

The Administration hopes that expanding access to association health plans and short-term health plans will provide consumers more affordable options for health care coverage. Yet, industry experts have warned that these types of plans lack key patient protections and would actually raise costs for some consumers. Most notably, these plans are exempt from the ACA’s essential health benefits (EHB) requirement, which ensures that health plans cover mental health and substance use disorder services. The National Council is strongly opposed to efforts to expand AHPs and short-term health plans as they will expose more consumers to non-comprehensive plans that lack critical behavioral health care coverage.

Further, these types of plans would be most attractive to healthier individuals, likely causing healthy consumers to leave ACA health insurance exchanges. If so, this could lead to higher premiums for remaining enrollees, including those with chronic mental health and substance use disorders, that rely upon the ACA marketplaces for health care coverage.

For more information, please see this fact sheet on the new guidance. To better understand why short-term health plans are harmful to consumers with behavioral health conditions, please see this fact sheet recently released by the National Council and three partners.