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Is Waiver the New Flavor of Health Care Reform?

The U.S. Senate’s health care reform bill, the Better Care Reconciliation Act (“BCRA”), contains some eye-catching changes to the Affordable Care Act (“ACA”), like substantial reductions in Medicaid funding – and some that are subtle but substantial, like Section 1332 waivers. Section 1332 of the ACA allows states to apply for waivers to pursue innovative and alternative approaches to health reform. The ACA currently allows states to seek waivers under Section 1332 of the law so long as (1) the waiver goes through the state legislative process, (2) policymakers can prove the change will not increase the federal deficit, and (3) the change will cover as many citizens with at least as generous of coverage under the ACA. Yet under the BCRA, this waiver process is much more relaxed and flexible, focusing exclusively on the impact to federal spending. Notably, state governors could request to waive certain requirements or protections under the ACA without legislative approval. “This would shift more regulatory power to change things like required health benefits or adoption of high-risk pools to the executive branch of state government,” observes Lindsay McLaughlin, health care attorney with Nilan Johnson Lewis and former health policy advisor to the insurance division of Minnesota’s Department of Commerce. McLaughlin noted that in 2017, the Minnesota Legislature passed one of the country’s few 1332 waiver requests—but only after a detailed state legislative approval process—to undertake a state-based reinsurance program. “Changing the law to allow governors to more easily implement this kind of process could result in health insurance coverage requirements or funding mechanisms for the individual and small group markets being changed by a handful of state officials rather than through an open legislative process. These changes would not only impact citizens buying insurance policies and insurance companies designing these plans in the individual and small group market, but health care providers would see a change in which services become covered by patients’ insurance plans. If mandated benefits decrease, providers are likely to see an increase in uncompensated care or patients avoiding care altogether.” To speak with McLaughlin about how this issue could affect health care providers and insurers, call her at 612.305.7739 or email

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