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Representative Randy Hultgren (R-IL) has introduced a bill in the House of Representatives which would simplify and streamline the application and approval process for Obamacare’s Section 1332 state innovation waivers. As it stands now, the Department of Health and Human Services (HHS) essentially blocks any 1332 waiver from moving forward, but this bill could potentially give the states real access to a tool that would allow them to opt out of the law’s essential health benefits provisions and insurance exchange requirements.
This new waiver process would give states a way to combat rising health insurance costs and market consolidation. Health-flex waivers would allow states more flexibility with what they consider “qualified” health plans and “essential health benefits,” with the goal being to give consumers more plan options with lower premium costs. For example, this waiver “would allow a health insurance market in a state to offer health plans that…may not offer maternity and newborn care or a network with essential community providers. Individuals in these states who purchase…less robust but less expensive plans would still be considered insured and eligible for federal insurance subsidies.”
At the same time, exchange waivers would allow to states to break up their current health insurance marketplaces and give consumers the ability to purchase health plans outside of the state and federal exchanges. This could be done directly through an insurer or an agent or broker, as well as on a private exchange. The states themselves would also certify what would be considered acceptable health plans.
The bill also lowers the Obamacare’s threshold for eligibility for insurance subsidies, bringing them down from 400 percent of the federal poverty level to 300 percent. Federal poverty guidelines allowed a family of four earning $95,400 last year to be eligible for a premium tax credit. Due to inflation, this benchmark usually increases each year. At this rate, by 2018 you will have families of four earning over $100,000 a year getting subsidized insurance coverage via Obamacare. While these subsidies are essentially acting as a form of welfare for the solidly middle class, a 25 percent reduction would make them more palatable by bring this eligibility level down to $72,750 in 2016.
Hultgren’s bill also requires states to offer at least one basic-level health care plan where the premiums do not exceed 6.5 percent of that state’s median household income. This will allow consumers to buy plans that include only the coverage they want. No longer, for example, will post-menopausal women be forced to buy plans that must include maternity coverage.
Another feature for consumers comes from the bill’s transparency requirements, especially in regards to premium increases and monthly and annual costs. The issuers of health plans must “make…available…the demographics of the population enrolled under the plan, the utilization and health care items and services by such population…and other factors that serve as a justification for the premium levels (including any premium increases) under the plan.” This will keep consumers from being kept in the dark about the reasons for their plan’s jump in costs.
Congressman Hultgren’s bill contains many interesting ideas that could bring real financial relief for families and real reform to Obamacare. His colleagues in the House would consider it well worth their time to investigate it for themselves.