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  • Provision in Affordable Care Act Could Unravel Obamacare

    A provision of the Affordable Care Act established to advance Obamacare could do just the opposite if a Republican is voted into the White House in the next election cycle.

    Section 1332 of the law, set to take effect in 2017, would allow conservative states to to change how they implement their health care policies without a congressional vote if the executive branch approves of the plan.

    Under the provision, if states provide a reasonable alternative that covers the same amount of people and doesn’t increase the deficit, requirements including the individual and employer mandate could be eliminated.

    The waiver would also give states flexibility on subsides and would potentially allow them to dispose of the online exchange.

    Arkansas is the first right-leaning state to consider using the measure, Politico reports.

    “Our hope is that we can get flexibility with the Obama administration,” Arkansas Surgeon General Greg Bledsoe told the publication. “But if we can’t get the flexibility that we want, we believe that a Republican administration would be a lot more flexible. We think we’d have a lot more common ground.”

    While section 1332 does provide some flexibility, it may not be the easy fix some conservatives are hoping for.

    According to Edmund Haislmainer, a senior research fellow at the Heritage Foundation, the waiver doesn’t come without its caveats.

    Haislmainer said, while one may be exempt from the mandate, the need for an equivalent could drive up the cost of care.

    “It would have minimal impact on bringing premiums down,” he said.

    The first issue he cited involves a provision that limits age variations to a maximum three to one ratio, meaning an elderly person can’t be charged more than three times more than a younger, healthier adult for the cost of their premium. Subsidies would then be utilized by a less needy demographic.

    Haislmainer also said states could face issues in creating an alternative due to a provision involving preexisting conditions.

    “Without the flexibility to adopt better rules on guaranteed issue and preexisting condition exclusions (something Sec. 1332 also does not permit), it is also difficult to see how a state could get rid of the individual mandate as part of any alternative design,” he said.

    Stuart Butler of the Brookings Institute wrote in a policy paper, even with certain limitations in place,  it “could lead to state health plans in the future that change the ACA beyond recognition.”

    Follow Juliegrace Brufke on Twitter

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