The Department of Health and Human Services (HHS) released new guidance on Section 1332 State Innovation Waivers under the ACA with the goal of reducing burdens on states applying for waivers.

Generally, the guidance makes it easier for states to satisfy the statute’s “guardrails” around comprehensiveness and affordability of coverage under 1332 proposals and to demonstrate that a sufficient number of a state’s residents would have coverage under the proposal. It also provides states more flexibility in how they put 1332 plans into operation.

With power shifting to governors, this move could ultimately change state health insurance marketplaces and encourage the development of two markets: one with lower premiums for healthier individuals and one with higher premiums for those who are sicker.