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Democrats in Governors’ Races Pounce on Trump’s New Health Waiver Rules

Revised guidance could complicate GOP prospects in some states

Wisconsin Democrats renewed their attacks on Gov. Scott Walker after the Trump administration’s latest health care move. (Al Drago/CQ Roll Call file photo)
Wisconsin Democrats renewed their attacks on Gov. Scott Walker after the Trump administration’s latest health care move. (Al Drago/CQ Roll Call file photo)

The Trump administration’s move this week to make it easier for states to waive aspects of the 2010 health care law would give increased power to governors to unilaterally change state health insurance marketplaces, raising the stakes in some gubernatorial races in the final weeks of the 2018 campaign.

Governors will be able to apply for waivers to exempt their state from certain requirements under the 2010 law without approval from their state legislatures, as had been required before the Centers for Medicare and Medicaid Services released a revised guidance for the waivers Monday.

In a year when health care is a focal point in campaigns, particularly for Democrats, the guidance could be another way for gubernatorial candidates to demonstrate their credentials on health care. Democrats are looking at flipping a handful of governors’ mansions this year.

“Pre-existing conditions is a top issue in the majority of governors’ races in America, and this will only increase the stakes for governors’ elections,” said Jared Leopold, a spokesman for the Democratic Governors Association.

Watch: GOP Shifts Messaging on Health Care Ahead of Midterm Elections

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The revised guidance gives states increased flexibility to put their own mark on their insurance markets by allowing the sale of plans that don’t meet all of the health care law’s requirements. Those include short-term plans and association health plans that can charge more or refuse to cover pre-existing conditions. States could essentially set up parallel insurance markets that sell cheaper but less comprehensive health plans than those offered in the exchanges created under the law.

The administration has said the move will give states more flexibility to provide more affordable insurance options. Critics say the move could harm marketplace consumers, particularly those with pre-existing conditions, because the waivers could drive up costs for plans that comply with the health care law.

While consumers would still have access to plans that meet all of the law’s requirements, they could become more expensive since healthy patients who improve the risk pool may be more likely to purchase less comprehensive plans off the exchanges.

“That market will screen out the people with pre-existing conditions,” said Karen Pollitz, a senior fellow at the nonpartisan Kaiser Family Foundation. “Underwritten coverage never did, never will voluntarily take people with HIV and cancer and [premature] babies in the NICU.”

For Democrats, the guidance was more evidence that Republicans would undermine the current protections for people with pre-existing conditions, a message candidates have been preaching for months.

In Michigan, Democratic gubernatorial nominee Gretchen Whitmer called the guidance the “latest attack” on health care. “As governor, I will always protect coverage for people with pre-existing conditions — unlike Bill Schuette, who joined nine lawsuits to repeal the ACA and rip health care away from 680,000 Michiganders,” she said on Twitter.

In Wisconsin, Republican Gov. Scott Walker has been questioned about the state’s involvement in a lawsuit to overturn the health care law. He released ads vowing that people with pre-existing conditions would be protected while he’s governor. His opponent, Democrat Tony Evers, has said he would immediately withdraw Wisconsin from the lawsuit if elected.

Democrats there noted that Walker had previously considered applying for a waiver to allow insurance companies to charge sick patients more when House Republicans included a similar idea in a bill to overhaul the health care law last year.

“Now, Trump has given Walker a new way to attack Wisconsinites’ health care and they deserve to know if the governor is going to further put their coverage in jeopardy,” Alex Japko, a spokesman for the state’s Democratic Party, said in a statement. “More than two million Wisconsinites have a pre-existing condition and they want to know if Scott Walker is going to threaten their coverage once again.”

Since CMS released the guidance Monday, no states have publicly indicated plans to apply for a waiver. Idaho and Iowa previously submitted requests for plans that do not meet the law’s requirements and experts say they might be more likely to be approved under the revised guidance.

A spokeswoman for Iowa Gov. Kim Reynolds, a Republican locked in a close race, said the state’s insurance division is looking into the waiver guidance, but there are no plans now to apply for a waiver. A spokesman for Idaho Gov. C.L. “Butch” Otter, also a Republican, said the state was monitoring the waiver announcement, but noted that the state had not applied for a waiver earlier this year when it sought to sell state-regulated plans.

The waiver policy would allow federal officials to consider the aggregate effects of a waiver application rather than how it would affect each subpopulation, as the previous policy required. That suggests both Iowa and Idaho could be more successful in earning approval for their previously released plans, said Joel Ario, a managing director at Manatt Health, who has worked with states on waiver applications.

It’s not just red states that have felt constrained by the previous policy’s guardrails. Ario said he knew of one state that was interested in setting up a Medicaid buy-in program to expand coverage through a waiver, although the Trump administration’s new emphasis on private plans rather than public programs could make it more difficult for such proposals to earn approval.

But Ario said governors could be hard-pressed for time to submit waiver applications in the new year, since the administration said in the guidance that waivers should be submitted in the first quarter prior to the plan year they would be in effect. That could be particularly tough for a new state administration.

“I’m not sure this guidance is going to cause states to jump and pick up the mantle that quickly,” he said.

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