The NCSL Blog


By Richard Cauchi

Beginning next January, a new state option, known as "1332 Waivers," within the Affordable Care Act (ACA) will take effect.

Screen with insurance optionsFor the first time since the federal law was signed six years ago (on March 23 and April 1, 2010) this new process allows any state to apply to modify key parts of the health law. 

Researchers for The Commonwealth Fund, who work in collaboration with NCSL, have published an updated examination of how, when and if, “these waivers may propose broad alternatives or targeted fixes to a number of the ACA's private insurance provisions, so long as they stay true to the law’s goals and consumer protections.”

After years of focus on implementing, selecting or opting out of the ACA’s provisions, recent final regulations, released in late December, now provide states with details on what may be possible.

The latest guidance and requirements are summarized in the posted alert, and include these facts and clarifications:

  • States can request a waiver from many of the ACA’s requirements related to private health insurance, including those concerning covered benefits, subsidies, the marketplaces, and the individual and employer mandates.
  • There’s a critical catch: States can forge their own path only within certain limits set by the law itself. A waiver must ensure that coverage is at least as comprehensive and affordable as the ACA provisions called for, must cover a comparable number of residents and cannot add to the federal deficit.
  • Important, too, is that while section 1332 gives states flexibility over the ACA’s private coverage provisions, it does not create new waiver opportunities for public coverage programs such as Medicaid. As in the past, any state that wishes to modify its Medicaid program must seek permission using a separate section 1115 waiver, which federal officials will evaluate independently of any changes the state might propose under section 1332.

Requirements include:

  1. Enrollment - Waiver program must provide coverage to a comparable number of state residents as would receive coverage without it.
  2. Affordability - Waiver program must provide coverage and cost-sharing protections against excessive out-of-pocket spending that are as affordable as would be provided without it.
  3. Comprehensiveness - Waiver program must provide coverage that is as comprehensive as would be provided without it.
  4. Deficit Neutrality - Waiver program must not increase the federal deficit.
  5. Legislative Role Required – 1332 waiver programs must be filed and passed by the state legislature.

A few states—including Arkansas, Hawaii, Massachusetts and Ohio—have taken a lead so far with more decisions possible during 2016 and 2017 legislative sessions. However there is no deadline for action.

Read the full post online for what each requirement means on the state level.  For details on state actions, also see NCSL’s online memo, State Roles and Legislation Related to 1332 Waivers.

Richard Cauchi covers health insurance reforms for NCSL.

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This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.