Issue Briefs | Apr 15, 2015

Innovation Waivers: An Opportunity for States to Pursue Their Own Brand of Health Reform

Deborah Bachrach, Joel Ario, and Hailey Davis, Manatt Health Solutions

States have long been the testing ground for new models of health care and coverage.  Section 1332 of the Affordable Care Act, which takes ef­fect in less than two years, throws open the door to innovation by authorizing states to rethink the law’s coverage designs. Under State Innovation Waivers, states can modify the rules regarding covered benefits, subsidies, insurance marketplaces, and individual and employer mandates. States may propose broad alternatives or targeted fixes, but all waivers must demonstrate that coverage will remain as accessible, comprehensive, and affordable as before the waiver and that the changes will not add to the federal deficit. This issue brief, prepared by Manatt Health Solutions and cosponsored by the Commonwealth Fund, describes how states may use State Innovation Waivers to reallocate subsidies, expand or streamline their marketplaces, replace or modify the mandates, and otherwise pursue their own brand of reform tailored to local market conditions and politi­cal preferences.