Health and Science

Trump administration waives some Obamacare rules for Alaska

Key Points
  • The waiver will allow Alaska to create an insurance pool for people who have one or more of 33 "high cost conditions."
  • HHS Secretary Tom Price applauded the announcement, saying it's "just one step" to usher in a new era of flexibility.
  • The House and Senate bills to repeal and replace the Affordable Care Act contain similar proposals.
People sit with an insurance advisor as they sign up for the Affordable Care Act in 2015.
Getty Images

The government agency that administers Obamacare showed a willingness to give states more leeway in managing their individual health insurance marketplaces.

The U.S. Centers for Medicare and Medicaid Services (CMS) said Tuesday that it approved a so-called 1332 state innovation waiver application. The waiver, the first of its kind, will allow Alaska to create a program that will cover claims in the individual insurance market for people who have one or more of 33 "high cost conditions."

Premiums in Alaska's individual marketplace have increased 203 percent since 2013, and only one insurer still offers plans on its health exchange, according to CMS.

With the waiver, Alaska expects premiums will fall 20 percent by 2018. CMS said the lower premiums will help more Alaskans receive coverage.

"Today's approval will temporarily stabilize Alaska's individual insurance market," said CMS Administrator Seema Verma, in a statement.

Under the plan, the cost of so-called silver health plan premiums will be reduced, which will result in the federal government spending less in premium tax credits. Alaska also will receive pass-through funding to help offset a portion of the state's costs for the state-operated reinsurance program.

Mark Zuckerberg: Alaska's cash handout program "provides some good lessons for the rest of the country"

CMS said Alaska will receive about $48 million from the federal government and put about $11 million of its own funds toward reinsurance next year.

Health and Human Services Secretary Tom Price, who has been a vocal critic of the Affordable Care Act, applauded the announcement.

"Washington does not have all the answers when it comes to healthcare," Price said in a statement. "State Innovation Waivers are just one step of many we are taking to inaugurate a new era of state flexibility and innovation in healthcare, and we look forward to more productive work with our state partners."

Alaska's waiver is similar to a provision of the health reform bill House Republicans passed in May. The House bill allowed for funding for states to create "high-risk" insurance pools. The Senate's Better Care Reconciliation Act includes similar measures.

"If the bill does go through, it's possible that states will also have this as an option to stabilize their marketplaces," Verma said on a call with reporters.

Momentum for the Senate's Better Care Reconciliation Act has fizzled, with moderates criticizing the number of Americans that could lose health insurance under the plan and conservatives criticizing the plan as not doing enough to roll back the Affordable Care Act's government expansion.

Reports indicated that the Senate could unveil a new version of the bill later this week. Facing mounting pressure to pass something, Majority Leader Mitch McConnell announced on Tuesday that the Senate would push back its summer recess to the third week of August.

In the meantime, more states are exploring the waiver program. Minnesota has a "reinsurance-type" waiver application pending, said CMS Deputy Administrator Randy Pate. New Hampshire, Oklahoma and Oregon are interested as well, he said.

Verma encouraged other states to apply and said she hopes to share more announcements in the future.

Watch: Delayed recess due to lack of cooperation on health care

Sen. Mitch McConnell delays August recess due to lack of cooperation on health-care bill