CMS to allow states to use ACA subsidies for health plans outside of exchanges

CMS intends to give states flexibility to reroute funding of ACA premium subsidies to coverage outside the health law's exchanges, according to Bloomberg.

Seema Verma, the administrator of the agency, made the announcement Nov. 29 at the American Legislative Exchange Council, an organization of state legislators focused on conservative policies.  

She revealed CMS plans to allow states to set guidelines for what type of health plans qualify for state ACA premium subsidies. She said CMS also plans to allow them to determine how such subsidies should be targeted and implement strategies to address the costs of people who are high risk.

"For too long states have looked to Washington with a 'mother may I' approach, and Washington has placed unworkable restrictions on the states … in the process undermining the very goal of its own policy … which was to make insurance more accessible by making it more affordable," said Ms. Verma.

CMS' plans come after federal officials in October unveiled new insurance guidelines for states and employers, which are designed to give them more flexibility to waive ACA regulations.

Ms. Verma said the guidance released in October and the additional waiver concepts both aim to help states provide consumers with higher quality, more affordable insurance coverage. As examples, she said states could direct ACA subsidies to people's personal health accounts, or potentially separate the risk pools in their health plan markets, according to Bloomberg

But health policy experts argue the waivers could result in fewer choices and more expenses for low-income, older or sicker residents, CNN reported .

Joel Ario, a former insurance commissioner who worked for the Obama administration setting up the ACA marketplaces, told Bloomberg last month: "Unless you keep everybody in the same pool the way the ACA does, and treat them all equally, you are making the people who don’t get the better deal into second-class citizens."

Ms. Verma reportedly said state requests will be examined individually, and CMS will particularly look at the effect of waiver requests for low-income people and those with high medical needs.

Access Bloomberg's report here and CNN's report here.


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