Governors’ Obamacare Waiver Power Would Broaden Under GOP Proposal

Discussion draft shows easier path to 1332 waiver

Senate Finance Chairman Orrin G. Hatch finds himself in a turf war with HELP Chairman Lamar Alexander over health care. (Al Drago/CQ Roll Call file photo)

Legislation from two Republican senators would allow governors to implement a waiver under the 2010 health care law without approval from state legislatures, a departure from current law, according to a discussion draft obtained by Roll Call.

The bill from Senate Finance Chairman Orrin G. Hatch and Idaho Sen. Michael D. Crapo would end the requirement for states to pass legislation to implement a so-called 1332 waiver. It would also let governors unilaterally end the program and would mandate that the Department of Health and Human Services secretary make a determination on a waiver application within 100 days.

It is the latest escalation in a turf war between Hatch and Senate Health, Education, Labor and Pensions Chairman Lamar Alexander of Tennessee, who is pushing his own separate legislation on the matter. The Senate Finance Committee has jurisdiction over the waiver program.

The legislation would explicitly prevent insurers from limiting access for individuals with pre-existing conditions, according to the discussion draft. It would also, however, remove the so-called guardrails on the waiver program that prevent a state’s proposed system from lowering the number of uninsured or increasing insurance costs, raising questions over how effectively individuals with existing medical conditions would be protected under the proposal.

“While fully repealing and replacing Obamacare remains a priority, this approach would remove some of the current hurdles facing states across the country and provide concrete options to assist states in caring for their low-income populations in creative and fiscally responsible ways,” Hatch said in a statement.

Crapo, in a statement, said “we look forward to continuing our work with the state to remove the regulatory and statutory hurdles that prohibit health care innovation.”

The draft shows Senate Republicans are continuing to pursue ways to build upon the current health care law after failing earlier this year to repeal large portions of it, though the legislation from Hatch and Crapo is likely to be viewed by Democrats as significantly undermining the existing waiver program.

Members from both parties have thrown their support behind legislation from Senate Health, Education, Labor and Pensions Chairman Lamar Alexander of Tennessee and Sen. Patty Murray of Washington, the panel’s top Democrat, that aims to stabilize the insurance market created by the health law.

That bill would make some adjustments to the federal approval process for 1332 waivers and give states additional flexibility under the program.

The waiver program allows states to experiment with their own health care systems aside from the requirements of the 2010 law, so long as some standards are met. States can waive certain aspects of the health care law if they can show the changes wouldn’t lower the quality of care or make care more expensive for individuals.

Under the Hatch-Crapo draft, governors would have more of an ability to bypass many of the requirements in current law.

Mary Ellen McIntire contributed to this report.

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