“Section 1332 of the Affordable Care Act (ACA) permits a state to apply for a State Innovation Waiver (now also referred to as a State Relief and Empowerment Waiver) to pursue innovative strategies for providing their residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA.

“State Innovation Waivers allow states to implement innovative ways to provide access to quality health care that is at least as comprehensive and affordable as would be provided absent the waiver, provides coverage to a comparable number of residents of the state as would be provided coverage absent a waiver, and does not increase the federal deficit.”

Source: Centers for Medicare and Medicaid Services. The Center for Consumer Information & Insurance Oversight. Section 1332: State Innovation Waivers. Last accessed Jan. 18, 2020.

“The Innovation Center was established by section 1115A of the Social Security Act (as added by section 3021 of the Affordable Care Act). Congress created the Innovation Center for the purpose of testing “innovative payment and service delivery models to reduce program expenditures …while preserving or enhancing the quality of care” for those individuals who receive Medicare, Medicaid, or Children’s Health Insurance Program (CHIP) benefits.

“Congress provided the Secretary of Health and Human Services (HHS) with the authority to expand the scope and duration of a model being tested through rulemaking, including the option of testing on a nationwide basis. In order for the Secretary to exercise this authority, a model must either reduce spending without reducing the quality of care, or improve the quality of care without increasing spending, and must not deny or limit the coverage or provision of any benefits. These determinations are made based on evaluations performed by the Centers for Medicare & Medicaid Services (CMS) and the certification of CMS’s Chief Actuary with respect to spending.

“Innovation Center is currently focused on the following priorities:

• Testing new payment and service delivery models, including Quality Payment Program Advanced Alternative Payment Models
• Evaluating results and advancing best practices
• Engaging a broad range of stakeholders to develop additional models for testing

Source: Centers for Medicare and Medicaid Services. About the CMS Innovation Center. Last accessed Jan. 18, 2020.

“Findings: States built their Medicaid ACOs on existing health care reforms and infrastructure. Facilitators of implementation included allowing flexibility in design and implementation, targeting technical assistance, and making clinical, cost, and use data readily available to providers. Barriers included provider concerns about their ability to influence patient behavior, sustainability of provider practice transformation efforts when shared savings are reinvested into the health system and not shared with participating clinicians, and limited integration between health care and social service providers. Medicaid ACOs were associated with some improvements in use, quality, and expenditures, including statistically significant reductions in emergency department visits. Only Vermont’s ACO demonstrated slower growth in total Medicaid expenditures.

“Conclusions: Four states demonstrated that adoption of ACOs for Medicaid beneficiaries was both possible and, for three states, associated with some improvements in care. States revised these models over time to address stakeholder concerns, increase provider participation, and enable some providers to accept financial risk for Medicaid patients. Lessons learned from these early efforts can inform the design and implementation of APMs in other Medicaid programs.”

Source: RUTLEDGE, R.I., ROMAIRE, M.A., HERSEY, C.L., PARISH, W.J., KISSAM, S.M. and LLOYD, J.T. (2019), Medicaid Accountable Care Organizations in Four States: Implementation and Early Impacts. The Milbank Quarterly, 97: 583-619. doi:10.1111/1468-0009.12386

“In its first 5 years of business, Covered California has been successful at keeping costs low, attracting customers, and encouraging insurer participation. For 2018, in the face of great uncertainty for the future of the ACA, the agency continued to take preemptive steps to protect consumers and insurers. California’s successful implementation of the ACA comes after years of foundational work by the state and stakeholder groups to create competitive markets, identify populations in need, and promote consumer-focused policies. By the time the ACA was passed, the state was ready to embrace reform and moved to immediately implement the law, quickly bringing the ACA’s benefits to millions of residents. Whether the state will be able to maintain these significant accomplishments will depend in part on the outcome of “repeal and replace” efforts that continue to be discussed in Congress. But, in keeping with California’s tradition of continually looking to build on previous efforts to move toward universal access, stakeholders met during 2017 in Sacramento and in large counties around the state, such as Los Angeles, to explore contingency plans for preserving the progress made by the state and Covered California in establishing a competitive marketplace for 2.3 million Californians in the individual market and expanding Medi-Cal to 3.8 million adults. In 2016, California expanded Medi-Cal using state funds to all low-income children 18 and younger regardless of immigration status. And in his first budget proposal since taking office in 2019, Governor Newsome proposed expanding Medi-Cal to low income adults age 19–25 regardless of immigration status, instituting a state individual mandate penalty, and increasing premium and cost-sharing subsidies for coverage purchased through Covered California. While parts of the country would prefer to return to a pre-ACA world and only do the bare minimum in terms of implementing the health reform law, California continues its long arc of progress toward universal access to health care.”

Source: Rasmussen, P., & Kominski, G. (2019). Sources of Success in California’s Individual Marketplace under the Affordable Care Act. Journal of health politics, policy and law, 44(4), 679-706. dx.doi.org/10.1215/03616878-7530849

“Indiana’s Medicaid expansion waiver involves a unique set of cost-sharing incentives. The POWER accounts are similar to health savings accounts, since contributions to them can be rolled over to the following year depending on health care use. However, the monthly payment structure may lead to their being perceived as premiums—which could be a barrier to enrollment. Also, the lockout feature for people with incomes of 100–138 percent of poverty who fail to make their contributions could also lead to lower coverage rates, relative to other expansion states. While other states have included some similar features in past and ACA-related waiver programs, Indiana is unique in its requirement of monthly payments for people at all income levels to obtain full benefits and a full lockout of coverage for some groups.

“Our results show that the coverage gains resulting from Indiana’s expansion were smaller than gains in neighboring states. However, several non-neighboring states, such as Arizona, Delaware and North Dakota, saw smaller gains in coverage than Indiana did, relative to their baseline uninsurance rate before the expansion. This is true for both people in the income range (below 100 percent of poverty) where a missed payment decreases benefit generosity and people in the income range (100–138 percent of poverty) where a missed payment results in a six-month lockout.

“Our study does not provide definitive evidence that the program design caused smaller coverage effects, but it suggests that further research with more detailed data is warranted to understand the impact of potential churn between Basic and Plus plans and the impact of the lockout on take-up rates and continuous enrollment. Further analysis is also needed on access to care, health outcomes, the impact of the lockout feature, and incentives for healthy behavior, particularly now that in April 2018 the Office of Management and Budget granted CMS permission to forgo the originally planned survey of HIP 2.0 enrollees as part of its formal evaluation.²⁷

Source: Seth Freedman, Lilliard Richardson, and Kosali I. Simon. Learning From Waiver States: Coverage Effects Under Indiana’s HIP Medicaid Expansion. Health Affairs 2018 37:6, 936-943.

“In this nationwide, population-based study of the association of Medicaid expansion under the ACA with county-level rates of opioid overdose mortality, we found empirical support for adopting and sustaining health coverage expansions as a potential tool for reducing opioid overdose deaths in the United States. Consistent with prior analyses^16,27 examining Medicaid expansion and mortality from other causes, we found decreased rates of opioid overdose deaths associated with the adoption of Medicaid expansion. In particular, given 82,228 opioid-related deaths from 2015 to 2017 in the 32 states that expanded Medicaid between 2014 and 2016, our findings suggest that these states would have had between 83,906 and 90,360 deaths in the absence of the expansion, implying that Medicaid expansion may have prevented between 1678 and 8132 deaths in these states during those years.

“In analyses differentiated by class of opioid, we found a more substantial decreased risk associated with overdose deaths involving heroin and synthetic opioids other than methadone, which have been associated with continued increases in opioid-related deaths in recent years. These findings align with previous research that indicates that implementation of the ACA was associated with 40% decreased odds of being uninsured among persons with heroin use disorders, primarily because of Medicaid expansion, whereas no changes in insurance coverage were detected among persons with prescription OUDs.²⁸ We also did not find support for an association between ACA-related Medicaid expansion and natural and semisynthetic opioid overdose mortality.”

Source: Kravitz-Wirtz N, Davis C, Ponicki W, et al. Association of Medicaid Expansion With Opioid Overdose Mortality in the United States. JAMA Network, Jan 10, 2020.

Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems in the US and several other nations.

Page last updated March 16, 2021 by Doug McVay, Editor.