CCAGW Urges Senators to Oppose 1332 Waivers CRA | Council For Citizens Against Government Waste

CCAGW Urges Senators to Oppose 1332 Waivers CRA

Letters to Officials

October 29, 2019

U.S. Senate
Washington, D.C. 20510

Dear Senator,

You will soon consider a Congressional Review Act (CRA) vote on S. J. Res. 52, which Senate Democrats are undertaking to reverse the Trump administration’s October 22, 2018 updated guidance concerning Sec. 1332 State Innovation Waivers. The Section 1332 Waiver Program is part of the Patient Protection and Affordable Care Act (ACA) or Obamacare.

On behalf of the Council for Citizens Against Government Waste’s (CCAGW) 1 million members and supporters, I ask that you oppose the CRA.

Obamacare has been a huge failure in many ways. While citizens were promised that a typical family’s premium would decrease on average by up to $2,500 per year, the exact opposite happened. The choice of health plans became more limited and premiums increased substantially, more than doubling in states using between 2013 and 2017. The Trump administration is doing what it can through regulation and executive branch guidance to repair the damage done by ACA. CCAGW has supported the administration’s effort on expanding the use of Section 1332 Waivers since the Centers for Medicare and Medicaid Services (CMS) released the new guidance in October 2018.

A CMS fact sheet lays out the new guidance on Section 1332 Waivers, which allow states to “pursue innovative strategies for providing their residents with access to high-quality, affordable health insurance.” States must follow five principles to develop their approach, which are to “provide increased access to affordable private-market coverage; encourage sustainable spending growth; foster state innovation; support and empower those in need; and promote consumer-driven healthcare.” In addition, the states must meet four statutory requirements or guardrails. These are to “provide coverage that is at least as comprehensive as would be provided absent the waiver; provide coverage and cost-sharing protections against excessive out-of-pocket spending that are at least as affordable as would be provided absent the Waiver; provide coverage to at least a comparable number of residents as would be provided absent a Waiver; and not increase the Federal deficit.”

As of today, 13 states have applied and received a Section 1332 State Innovation Waiver, with 12 of them currently using it, or planning to deploy it in 2020, to operate a reinsurance program and help people with pre-existing conditions afford their healthcare and lower premiums in the individual market.

An August 13, 2019 study by The Heritage Foundation found that six of the seven states that were operating a risk-mitigation, or reinsurance program under a 1332 Waiver during the 2019 plan year saw an average premium decrease of 10.72 percent, as opposed to the average increase of 3.09 percent for the benchmark premium among non-Waiver states. The five states that have Section 1332 Waivers in place but, have not yet seen its effect, estimate that their benchmark premiums will drop 5.9 to 19.8 percent in 2020. Here are some examples of the positive impacts that have occurred as a result of Section 1332 Waivers:

  • In September 2019, the state of Maryland, which applied for a Section 1332 Waiver for a reinsurance program in May 2018, and received approval in August 2018, announced an average rate drop of 10 percent for plans in the state’s individual health insurance exchange for 2020. This is the second year Maryland has seen a drop in their insurance premiums, thanks to the Waiver. Last year the state experienced a 13 percent average drop for 2019 plans.
  • Montana’s Office of the State Auditor announced on August 21, 2019, that the state will see premium rates in the individual market drop by double digits in 2020, with average reductions ranging from 11.9 percent to 14.1 percent for three insurance companies.
  • North Dakota’s insurance commissioner announced on August 1, 2019, that the state is expecting premium rates to drop on average between 8 and 20 percent for plans purchased in the individual market for 2020.

Democrats are fixated on states being allowed to have short-term, limited duration plans and association health plans as part of a Section 1332 Waiver, even though fully-ACA compliant plans must also be offered. Their real goal is to reverse the Trump administration’s successful policy of making Section 1332 waivers more flexible, allowing states to implement innovative changes and improvements to lower healthcare costs, while still protecting those with pre-existing conditions.

Instead of restricting the use of Section 1332 Waivers, Congress should consider codifying the changes the administration has made. States should be allowed to pursue new options that improve healthcare for their citizens.

Therefore, CCAGW urges you to vote against the minority’s CRA that would roll back the Trump administration rule on Section 1332 Waivers. All votes on the CRA will be among those considered for CCAGW’s 2019 Congressional Ratings.


Tom Schatz
President, CCAGW

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