Reply #17: That's a bit misleading. [View All]

States can't just opt out. They have to implement an alternative that meets certain requirements that are specified in the reform law and they have to make the case to federal agencies that they've met those requirements so they can get a waiver approved. The federal agencies are not permitted under the law to grant a waiver unless the requirements are met. I believe the requirements are that the state's plan must cover at least as many people as would be covered under the federal rules, and in a comprehensive and affordable way that would not add to the federal deficit.

No state has yet gotten to the point of applying for such a waiver so we don't know yet what kinds of alternatives would be accepted. Vermont intends to get a waiver by implementing a single-payer public plan, but they haven't yet gotten to the point of applying and getting a waiver approved. It seems pretty obvious that such a plan would meet the requirements, but we don't yet know whether it may be a Republican administration that gets to make approval decision and, if so, whether they would play games and essentially ignore the requirements.

Under current law the earliest such a waiver can take effect is 1/1/2017. There is legislation pending to move that date earlier so that these waivers can take effect on 1/1/2014.

There is also another type of waiver so it is easy for this subject to get confusing. The other type is a temporary waiver of the 80% minimum loss ratio requirement that is otherwise already in effect. Lots of these waivers have been granted to individual insurers and to at least one entire state (Maine) but they are temporary. Eventually all these insurers will have to comply.