The waivers in the Senate health bill are crazy

From my latest at Vox, on the Better Care Reconciliation Act of 2017:

The Senate bill retains [the ACA’s] waiver provision—but removes the guardrails that ensured state-based alternatives would offer strong coverage. Under the Senate bill, to get a waiver a state doesn’t have to demonstrate anything about coverage. Instead, it just has to show that the plan won’t “increase the Federal deficit.” Once a state makes that showing, the bill is explicit: the Secretary of Health and Human Services “shall” approve the plan.

Not “may” approve the plan: “shall.” This is a crucial legal distinction. The Supreme Court has squarely held that this sort of mandatory language means what it says: if the condition is satisfied, the Secretary has no choice but to give his approval.

That could lead to some bizarre consequences. What’s stopping a state from submitting a half-baked plan for a high-risk pool that will lead millions of people to lose coverage? Or, for that matter, from using Obamacare money to fund public schools or affordable housing? According to the Senate bill as written, the Secretary would have to approve plans like that so long as they don’t increase the federal deficit. …

And once a waiver is granted, the Senate bill says that the federal government cannot terminate the waiver, no matter what. It is hard to overstate how unusual—even unique—this is. When the federal government offers money to states, it places conditions on how the states are to use that money—and reserves the right to cut the states off if they fail to adhere to those conditions. The cut-off threat is essential to prevent state abuse of federal funds.

The Senate bill removes that threat. It says that a waiver “may not be cancelled” before the waiver’s expiration. If state officials blow the Obamacare money on cocaine and hookers, there’s apparently nothing the federal government can do about it. At the same time, the bill expands the duration of waivers from five years to eight years. The upshot, then, is that the next president won’t be able to renegotiate any waivers granted during the Trump administration, no matter how badly a given state might have abused its waiver.

Believe it or not, that’s not even the craziest thing about the new waiver rule. Read the whole thing!



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