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Pallone & Neal: Trump Admin’s Section 1332 Changes are Illegal

Nov 29, 2018
Press Release
“This guidance is unlawful, will raise costs for older and vulnerable Americans, and will eliminate protections for individuals with pre-existing conditions.”

Today, Energy and Commerce Ranking Member Frank Pallone, Jr. (D-NJ) and Ways & Means Ranking Member Richard Neal (D-MA) sent a letter to top Trump Administration officials demanding answers to a series of questions on the Administration’s latest illegal efforts to undermine the Affordable Care Act (ACA) through improper use of Section 1332 waivers, which will raise costs for older and vulnerable Americans and eliminate protections for people living with pre-existing conditions. This letter comes after the Administration announced new guidance today that will allow states to use waivers to further undermine or ignore the ACA.   

“We believe this sub-regulatory guidance exceeds the Secretaries’ statutory authority,” Pallone and Neal wrote. “Outside of the notice-and-comment rulemaking process, it interprets the guardrails in Section 1332 to allow states to increase consumers’ costs, reduce coverage, and undermine protections for individuals with pre-existing conditions.  It is contrary to the plain language of the statute, and it appears to be part of the Administration’s ideologically motivated efforts to sabotage the ACA.”

The ACA gave states flexibility in Section 1332 of the law to experiment with health insurance reforms that could improve the well-being of their residents, but with a clear statutory directive to maintain the levels of benefits, affordability and coverage provided to state residents by the ACA.  The Trump Administration’s latest guidance disregards the plain text of the law, as well as the congressional intent behind Section 1332 waivers by simply allowing states to show that a comparable number of residents have access to “meaningful” coverage, regardless of whether they actually have coverage.

If allowed to go into effect, the Trump Administration’s proposed changes would allow the Secretary of Health and Human Services to approve waivers that do not provide coverage that is as affordable or as comprehensive as under the ACA. As a result, people with pre-existing conditions, older Americans, and women will once again be susceptible to discrimination by excluding needed benefits, charging them higher premiums, and even denying coverage altogether.

Pallone and Neal are requesting answers to a series of detailed questions on the proposed changes by December 13, 2018, including how the Administration came up with their proposed changes to Section 1332 waivers, a comprehensive document request, a list of who was involved in the process, and an explanation on why the Administration decided to promulgate the changes as Section 1332 guidance rather than go through a Notice of Proposed Rulemaking process.

The letter is available HERE