ADEA State Update

Trump Administration Redefines Rules for ACA Subsidies

(Insurance, Medicare and Medicaid, HHS, ACA, Medicare and Medicaid Services) Permanent link   All Posts

Health_MosaicOn Nov. 29, the Centers for Medicare & Medicaid Services announced four new ways states will be allowed to use subsidies under the Affordable Care Act (ACA). Through the use of “State Relief and Empowerment Waivers” (also known as 1332 waivers), states can request expanded use of subsidies to cover plans that do not cover all of the benefits mandated by the ACA, provide public subsidies to consumer-directed accounts in which funds could also be combined with funds from an employer or another source, increase flexibility to implement reinsurance programs or high-risk pools, or implement a new state-specific subsidy structure that meets specified guardrails and reduces federal spending on tax credits.

The Trump Administration is promoting the expanded use of subsidies as a way to increase consumer choice, lower costs and empower state innovation. Some Democrats in Congress, however, have questioned the legality of the waivers, stating they extend beyond the authority of Health and Human Services Secretary Alex Azar. Additionally, critics of the waivers believe that the use of subsidies for plans that are not required to provide coverage for people with pre-existing conditions could result in increased premiums for those individuals, as it could result in separate risk pools for those without pre-existing conditions and those with pre-existing conditions.

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