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Friday, September 15, 2017

A Big Test for “Big Waiver”

This year’s procedural window for passing an Affordable Care Act overhaul via reconciliation closes at the end of the month.  The latest proposals out this week are “Graham-Cassidy” (which sounds like a 1970s fusion band) and “Medicare-for-all” (which sounds like an instant-aging tonic).  Hundreds of billions of dollars hang in the balance, as does access to meaningful health insurance and financial stability for millions of people.  It is kind of a big deal.  But beyond this last gasp in a months-long moment for health reform, these efforts also represent a moment for statutory “big waiver,” which is itself a big deal.  I’m here to highlight big waiver’s big moment and some of the ways that the ACA and its proposed replacements unmake law. 

“Big Waiver,” coined by Professors Barron and Rakoff in their 2013 article, In Defense of Big Waiver, describes statutory waiver provisions permitting administrative agencies to displace the very “heart of the statutory framework – the express provisions of it that seem most central to its effective operation.”  With big waivers, statutes can simultaneously make law and allow its unmaking by administration.  The ACA and several other statutes of the past two decades employ big waivers.  As Barron and Rakoff posed in 2013, rise of big waiver may serve political and pragmatic purposes.  Politically, inclusion of a big waiver may encourage legislators to overcome gridlock and vote for substantial legislation because waiver creates an escape hatch of appeasement.  Pragmatically, as a statute ages, a big waiver provision also may help its framework endure by adapting without further resort to the legislative process. 

The ACA has a “Waiver for State Innovation” that allows states to apply to the Department of Health & Human Services for a waiver of the statute’s big-ticket reforms:  the individual mandate, employer mandate, subsidies, insurance exchange requirements, and some coverage regulations including the “essential health benefits.”  The catch is that states have to enact their own laws to replace the waived provisions.  And the replacement laws must plausibly be equivalent to the ACA in affordability, comprehensive coverage, and number of people insured, as well as being budget-neutral for the federal government.  These standards further the statute’s core intentions, but suspend the preemptive federal provisions designed to achieve them.  The ACA’s big waiver became available just nine months ago and states have already have quietly pursued a number of waivers, large and small. 

The legislative efforts to repeal, replace, or simply renovate the ACA this year have presented a big test for big waiver, playing out on the field of health reform.  The replacement proposals have included mega-waivers with vastly diluted standardscrazy waivers, even.  Big waiver’s popularity as a legislative tool has only increased, at least for health law.  But those mega-waiver proposals thus far have failed fulfill big waiver’s political consensus-building role and attract the 51 votes necessary to break the stalemate.  The failure on this dimension of big waiver likely owes to the fact that the mega-waivers reinforced proponents’ priorities, rather than offering appeasement to the critics.  The recent proposals wield big waiver as a tool to unmake prior law, despite opposition, rather than to soften new law and build consensus.  

On the practical dimension, the ACA’s big waiver had mere months to begin adjusting the statutory framework to account for implementation.  Yet, on a small scale, tailored waivers already have enabled some states to shore up their health insurance markets.  Whether its big waiver will enable the ACA to bend in the political winds without breaking remains to be seen.  The next two weeks will put this test in sharp relief. 

I’m highlighting the ACA’s big waiver because health law is my thing.  But big waiver transcends health law.  Education, immigration, national security, and welfare laws, among others, all have their own big waivers.  If big waiver is facing a big test in your area of law, I would be interested to hear about it.  As a longtime-listener-first-time-caller to Prawfs, I’m happy to be here and among such good company. 

Posted by Liz McCuskey on September 15, 2017 at 12:08 PM | Permalink

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