On July 21, long-standing Senate rules gave Republicans a set-back: they would need—and will not get—Democratic votes to keep new abortion coverage restrictions and Planned Parenthood defunding in their reconciliation bill, the Better Care Reconciliation Act (BCRA). Senate Republicans have striven to promote a conservative agenda in their attempts to “repeal and replace” the Affordable Care Act (ACA), but one of the BCRA’s little-understood provisions could undermine this conservative aspiration.
The BCRA would allow states to change a wide range of ACA policies through State Innovation Waivers without the current limitation that, in so doing, states must provide just as many people with coverage that is as affordable and comprehensive. The bill requires that states submit an application for a waiver, but Tom Price, the Secretary of Health and Human Services, would not be able to reject an application unless it was incomplete, or the proposal would increase the federal deficit. Once approved, Secretary Price would have no authority to revoke the waiver for its eight-year duration.
Attention to date has been on how states would be able—and even pressured—to make essential health benefits and annual out-of-pocket limits meaningless. Experts point out that waivers essentially would act as a back-door way to undermine the pre-existing condition protections. States could also “innovate” by using all the federal funding for premium tax credits for different purposes, with no limitations whatsoever. For example, a state could use it to provide health savings accounts instead of coverage.
What has been less examined is how State Innovation Waivers could be used to undermine some of the conservatives’ own goals, in this bill and beyond. As it turns out, there are a number of things that liberal governors could do with a waiver, with no ability for Secretary Price to stop them, so long as the proposals would not increase the federal deficit.
A governor could, for example, use a waiver to eliminate any new abortion coverage restrictions for individual-market qualified health plans, should they figure out a way to reinstate them under Senate rules.
A governor that supports Planned Parenthood clinics could use funding from a waiver to backfill any cuts from Congress. (Such cuts are proposed in the separate annual budget bill.)
A governor could use federal funding to subsidize insurers of religious employers to provide services such as contraception and gender-reassignment surgery.
Given that increased use of injectable drugs is causing a surge in HIV and Hepatitis C, a governor could use waiver funding to support needle-exchange programs to limit the collateral damage of the opioid epidemic.
Without the need for legislative approval, a governor could even use funding from State Innovation Waivers to support school-based gun safety programs, training for gun safety counseling, and increases in law enforcement of gun restrictions.
And, Secretary Price would have to automatically approve California’s 2016 application to allow undocumented people to purchase unsubsidized coverage through its Marketplace (called CoveredCA), should the BCRA become law.
These examples illustrate that providing states with “money on the stump” and unfettered flexibility is a double-edged sword when it comes to achieving liberal or conservative policy goals.