• Issue Brief
  • September 14, 2017

Section 1332 State Innovation Waivers

Section 1332 State Innovation Waivers: Status of current state activity

Section 1332 of the Affordable Care Act (ACA) allows states to seek a waiver of key coverage provisions in the law and to experiment with different health coverage models. States can seek a Section 1332 waiver in conjunction with a Section 1115 Medicaid waiver, but cannot use a Section 1332 waiver to change Medicaid program requirements. States may not waive the private insurance protections enacted under the ACA.

States with an approved waiver receive the federal funds that would have been provided to their residents through premium tax subsidies and cost-sharing reductions as “pass through” funds to support the state innovations.

To date, the Centers for Medicare & Medicaid Services (CMS) and Department of Treasury have approved waivers from Alaska and Hawaii. Several additional states have submitted waiver applications or have passed authorizing legislation to do so.

The Trump administration and Congress are considering possible regulatory or statutory changes to both streamline the application and approval process and to provide more flexibility to states through the Section 1332 waivers.