Section 1332 Waivers: Will We See More State Innovation?

Prepared for the National Institute of Health Care Management (NIHCM) Foundation

Stakeholders across the country are focused on effectively implementing the Affordable Care Act (ACA) and making incremental—not radical—changes to it. But how can change happen given the deep national divisions around what corrections are needed? One answer lies in Section 1332 of the ACA, which invites states to be “laboratories of democracy” in experimenting with ACA reforms that do not have enough support to pass Congress but could garner backing at a state level.

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In a new essay prepared for the NIHCM Foundation, Manatt Health examines Section 1332 waivers and the opportunities they offer states to customize health reform, starting as early as 2017. Narrow interpretation of the statute’s protective guardrails has limited state action to date, but this guidance can be relaxed by the next administration, which could spark bolder state experiments.