The Wyden Waiver (Section 1332 of PPACA) is an extremely interesting dare built into the Affordable Care Act that if the Republican Party was interested in policy, we should be hearing a lot about early prep work. The dare is simple:
If a state can do as well or better in providing as good coverage to as many people at the same or lower cost as provided through the Exchanges but can do so in a different model, they can build out an Obamacare alternative effective 1/1/17.
The feds would kick in the entire expected sum of premium subsidies, cost sharing assistance subsidies and small business subsidies to the state. The state could tweak benefit packages, get rid of the mandates, change essential health benefits and pay for those changes with the federal block grant. Vermont had planned on a Wyden Waiver for its single payer plan that fell apart on the issue of transition costs.
The big constraints on a Wyden Waiver is that it had to be deficit neutral for the federal government and it had to be as good or better than the current Exchange model.
When PPACA was first scored by the CBO (March 20, 2010 report, Table 3), the CBO expected the Exchange and small business tax credits to cost $78 billion dollars in 2017. That estimate has been steadily decreasing. Now, the March 2015 baseline has an estimate of $73 billion dollars for direct coverage expansion costs on the Exchange. Premium costs are still growing slower than expected and the CBO is starting to model that there has been a real and sustained slow down in medical inflation that is somewhat disconected from general economic conditions.
Innovating programs that can do the better with the same level of resources are far easier to pull off when the budget is fat. My question is what does the declining net cost of coverage expansion through both lower unit cost and higher employer sponsored insurance uptake do to the feasibility of states that want to go the Wyden Waiver route? A cheaper PPACA means the success zone’s lower boundary got higher and the entire zone got narrower.
Baud
Expect the waiver to be broadly interpreted beyond all recognition if the GOP wins the White House next year.
Oh, and all those concerns about executive branch lawmaking to evaporate as quickly as deficit concerns.
WereBear
I recently read a book that was published a few years back. It described the then-current pitiful state of our health care system, and the last chapter outlined all the things that needed to be done to turn it around.
I was thrilled to note that ACA hit almost all of them. That President Obama! He knows how to write legislation too, I suspect.
MomSense
Ha.
Jinchi
Keep in mind that the Republicans just replaced the head of the CBO with Keith Hall, chief economist for the White House Council of Economic Advisers under George W Bush. They did it, in part, because they didn’t like how the CBO scored the health care law.
modernhealthcare.com/article/20150227/NEWS/150229910
Tom Levenson
Just a bit off topic: What drives me utterly crazy about elite media right now is the way the GOP gets away with hammering the mantra of Obamacare’s failure. Every single time one of those folks say that, it’s the job of a journalist to press home on the claim. They don’t. Ever…and hence the implications of what Richard’s saying never reach the world of off-K St. political discourse.
WaterGirl
I thought this was going to be an action post.
I read “waivers” and “scores” as verbs.
benw
Richard, thanks again for some expert level posting. It seems to me that the Wyden waivers are a good thing for those of who support a more progressive health care system in the US, as long as the Federal exchanges will always remain in place as a backstop. Most states that are resisting the PPACA are doing to basic things: declining the Medicare expansion thanks to the Supreme Court ruling, and refusing to set up their own exchanges. So the Federal exchanges serve the people in those states.
If Republicans win the Presidency and maintain control of Congress in 2016, they can try to change Federal law to interpret “good coverage” broadly enough to allow states with working exchanges to eliminate them via a Wyden waiver with nothing to really replace them. But this will simply push people onto the Federal exchanges. And in order to get into the narrower zone of the cheaper ACA, states will have to be more aggressive with plans like single-payer to be better than the exchanges.
So the pressure provided by the waivers seems to push toward more progressive health care legislation at the state level. I didn’t know that VT’s plan failed the waiver; that’s too bad because the VT plan seems perfect for the Wyden waiver test. What would be really disastrous in the current system is for a Republican government to eliminate the Federal exchanges.