Wyden's waiver: state innovation on steroids

Section 1332 of Title I of the Affordable Care Act offers to state governments the ability to waive significant portions of the ACA, including requirements related to qualified health plans, health benefit exchanges, cost sharing, and refundable tax credits. It permits state governments to obtain funding that otherwise would have gone to residents and businesses through the ACA and to use those funds to establish, beginning in 2017, an alternative health reform framework within statutory limitations. Section 1332 also permits states to apply in a coordinated fashion for waivers from Medicare, Medicaid, the Children's Health Insurance Program, and "any other federal law relating to the provision of health care items or services." This article reviews the statutory provisions and related regulations of this new and unprecedented state waiver authority, as well as the legislative history of section 1332. Finally, it reviews the limited activities thus far by states contemplating use of this provision and considers ways this authority may be considered for use by states in the future. Section 1332 has the potential to instigate a new, varied, and unprecedented array of state health sector innovations from both sides of the political divide over health care reform.