Washington’s 1332 Waiver Presents Opportunities for Health Equity

  ·  Health Policy Hub   ·   Katherine VilledaGuest Bloggers

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On December 9, 2022, the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Treasury approved Washington’s State Innovation Waiver under Section 1332 of the Affordable Care Act (ACA). This section 1332 waiver authorizes Washington’s state exchange to expand access to health and dental plans for state residents across all incomes, regardless of their immigration status, beginning January 1, 2024. When the ACA was passed, it excluded undocumented immigrants, including DACA recipients, from enrolling in marketplace plans. This waiver effectively removes the immigration requirements one must meet to enroll in exchange plans for Washington residents.  

Getting the waiver across the finish line required strategic partnerships, communication, and action. The waiver was submitted in May to HHS and Treasury and received 400 comments in strong support during the state’s public comment period. Our friends at Northwest Health Law Advocates (NoHLA) were at the forefront of this effort, alongside others in a broader Health Equity for Immigrants Campaign, and offered insights on their advocacy efforts to get the waiver approved.  

Why did you all take this approach? 

Washington has been working on immigrant coverage solutions for three decades. In the 1990s, we had a program for low-income people, regardless of immigration status, called Basic Health, though enrollment was capped. In the early 2000s, we extended coverage to all low-income kids. After Basic Health was shuttered in the great recession and lead-up to the ACA, advocates have spent the last decade slowly building back coverage for immigrant adults who were excluded from the ACA’s Medicaid expansion and marketplace coverage. In addition, the state legislature expanded Medicaid family planning regardless of immigration status and most recently extended our postpartum program to 12 months regardless of status. 

However, advocacy efforts had not succeeded in restoring full coverage for immigrants despite the inequity that causes many Washingtonians to be unable to access life-sustaining care. When COVID hit in 2020, it became more widely recognized that disparities in coverage and care were inhumane and that an incremental approach was insufficient. The higher rates of COVID hospitalization and death in BIPOC communities were glaring evidence of inequity. It became clear that public health policy must include meeting the basic needs of all Washingtonians, regardless of immigration status.   

Immigrant community leaders and allies convened a group to develop a new campaign. The Health Equity for Immigrants campaign has been unapologetic and immigrant-positive. We are community leaders, health care providers, and advocates who have worked together to improve access to affordable health care and coverage for all Washington residents. Guided by a community-informed approach, we prioritize equitable access for uninsured and underinsured individuals due to immigration status restrictions. Immigrants are essential members of U.S. society and deserve the same opportunities to access quality health care as all other Washingtonians.   

The pandemic has underscored how racist systems and xenophobic policies exacerbate health disparities. Yet, the pandemic also highlights our interconnectedness. Ultimately, our communities and those around us influence our health and families.   

Washington’s 1332 is a straightforward waiver request – it asked for CMS and Treasury to waive the definition of a qualified individual who can purchase coverage through the exchange. Rather than building a separate structure, this approach eliminates administrative complexity by allowing all Washingtonians access to the same marketplace regardless of immigration status. Additionally, this will enable mixed-status families to enroll in the same plan, improving care coordination and avoiding separate deductibles. 

Who will be most impacted by the approval and implementation of this waiver? 

The most directly impacted will be undocumented immigrants and those not qualified for federal programs with limited income. In 2017, an estimated 40.7% of undocumented individuals were uninsured in Washington, compared to just 5.7% in the overall population. In 2019 for 1 in 4 people in Washington who lacked health coverage, immigration status was the reason – that’s over 105,000 of our neighbors, family members, and community members.   

Health equity for immigrants is a racial justice issue. Due to over a century of xenophobic immigration policy driven by racism, the majority of the undocumented immigrant population are visible minorities: 45.8% are Latino/a, 37% are ethnically Asian, or Pacific Islanderand 5.4% are Black, Indigenous, or of mixed ethnicities. The state’s waiver approval will “help Washington work towards its goals of improving health equity and reducing racial disparities by expanding access to coverage for the uninsured population through the state health care exchange, all the while not increasing costs for those currently enrolled.”   

All Washingtonians stand to benefit from our 1332 waiver: actuaries estimate that expanding the pool of people enrolling in health coverage will modestly lower premiums for everyone. The waiver will be effective from January 1, 2024, through December 31, 2028.  

What barriers did you encounter, and what do you hope other state advocates and state agencies can take away from Washington's experience? 

Washington is blue in some areas, and red in others, but nearly 3 out of every 4 Washingtonians agree that the U.S. medical system needs to change. Additionally, overwhelmingly, Washingtonians (86%) agree that the government should lower the amount patients are charged for treating and maintaining conditions that disproportionately affect disadvantaged groups. Despite that, when a bill to ensure equity in health coverage was introduced in 2021, it did not get a hearing. That experience highlighted the importance of a broad campaign to demonstrate widespread support and to hold legislators accountable.   

The 2021 bill did start a conversation with elected officials who directed Washington’s Health Benefits exchange to explore the 1332 waiver option. The 1332 waiver will allow access to standard health coverage plans and state subsidies for those who are income eligible. In the early days of the pandemic, there was a realization that a substantial portion of essential workers were immigrants. Undocumented Washingtonians paid $1.1 billion in taxes in 2019, including$371 million in state and local taxes, but are structurally excluded from most of the social safety net. 

Since U.S. immigration policy continues to criminalize those lacking federal immigration status, privacy is of paramount concern for many families. In Washington, an estimated 170,000 U.S. citizens live with at least one undocumented family member. Recognizing that this could present a barrier to potential applicants, we partnered with the Health Benefits Exchange to ensure that privacy protections are included in the Special Terms and Conditions of Washington’s 1332 waiver. 

Washington’s 1332 waiver is a locally tailored solution to meet our state’s policy goals. Thanks to CMS and Treasury approval, in 2024, all Washingtonians can use their money to purchase health coverage from our state exchange. However, even with legislative authorization and a federal waiver, implementation will require significant efforts to ensure adequate funding. To increase affordability, Washington has designated $55M in state funds for subsidies for premiums for Cascade Care Savings health plans purchased through the state exchange for those whose income is below 250% FPL, regardless of immigration status. Since federal subsidies are not available to the newly eligible population, additional state funds will be necessary to bring plans within reach for many people. Expanding access to affordable health coverage improves the health of our entire state.   

What's next with the waiver's implementation? 

Washington’s 1332 waiver is one step toward the Health Equity for Immigrants campaign’s broader strategy to attain a future where everyone in our state can access the health care we need, regardless of immigration status. Another critical piece is a Medicaid-equivalent state-funded program for adults with income up to 138% FPL, regardless of their immigration status. The 2022 legislature directed the state agencies to plan for this program to begin in 2024 along with the exchange program.   

However, exchange subsidies are limited, and the Medicaid-equivalent program still needs to be funded. Our immediate focus is threefold: 

  • Partnering with the Health Benefits exchange on implementation to ensure a successful launch in 2024, 

  • Funding and providing legislative authorization for the Medicaid-equivalent program, 

  • Securing additional state subsidies to enable those eligible to afford the newly-offered exchange coverage.  

Thanks to Lee Che Leong and Emily Brice from Northwest Health Law Advocates (NoHLA) for sharing their insights! 

The approval of this waiver is significant and presents future opportunities for states to take on bold measures toward health equity. Historically, section 1332 waivers have been used for reinsurance programs to lower premiums, and now states are successfully exploring new avenues. In addition, this approval expands the approaches advocates can explore at the state level to increase access to affordable, quality health coverage for immigrants along with state-funded Medicaid-like or cost-sharing programs. Finally, as more states consider submitting waivers to expand coverage, we hope to see federal agencies use this opportunity to create clear and transparent guidance.