turn require another § 1115 waiver from the federal government,77 probably
consolidated with a broader State Innovation Waiver available under § 1332
of the Affordable Care Act.78 The content of these State Innovation
Waivers, potentially quite broad but not yet clearly defined by regulation,79
will be the subject of critical negotiations between HHS and the states,
informed by state-level deliberations such as those under way in Arkansas.80
One threat loomed, in early 2015, over the prospective continuation of
the “private option” (or any re-named analog): the Supreme Court’s
possible overturning in King v. Burwell81 of federal subsidies for low- and
moderate-income Marketplace enrollees in states not operating their own
Marketplaces. Arkansas’s Marketplace is operated as a federal-state
partnership, rendering it vulnerable should the Court have ruled in favor of
the Affordable Care Act’s challengers in King. The federal subsidies are
essential to the Marketplace’s viable operation—in Arkansas, nine of ten
Marketplace enrollees are estimated to receive a subsidy82—and the
“private option” depends on the Marketplace’s continuance.
77. Such waivers appear more likely to be obtainable upon a demonstration that the
previous § 1115 waiver met with success. Interview with Craig Wilson, Arkansas Center for
Health Improvement, in Little Rock, Ark. (March 24, 2015) [hereinafter Wilson March 2015
78. Pub. L. No. 111-148, 124 Stat. 119.
79. Section 1332 State Innovation Waivers allow states with HHS approval to modify
A. C. A. rules governing covered benefits, Marketplace subsidies, individual and employer
mandates, and methods of health plan choice. These waivers must satisfy four “guardrail”
criteria: ( 1) coverage must be “at least as comprehensive” as coverage absent the waiver; (2)
cost-sharing protections against excessive out-of-pocket spending must result in coverage “at
least as affordable” as coverage absent the waiver; (3) coverage must be provided to “at least
a comparable number of residents” as coverage without the waiver; and (4) the waiver must
not increase the federal deficit. These indefinitely defined “guardrail” criteria leave plenty of
room for interpretation and negotiation. For analyses of the types of policies that § 1332
“State Innovation Waivers” might permit, see, e.g., Andrew Allison, Arkansas’s Alternative
to Medicaid Expansion Raises Important Questions about How HHS Will Implement New
ACA Waiver Authority in 2017, 39 J. HEALTH POL. POL’Y & L. 1089 (2014); Deborah
Bachrach, Joel Ario & Hailey Davis, Innovation Waivers: An Opportunity for States to
Pursue Their Own Brand of Health Reform (April 2015), http:/
bachrach_innovation_waivers_rb_v2.pdf (Commonwealth Fund issue brief); Heather
Howard & Galen Benshoof, Section 1332 Waivers and the Future of State Health Reform,
HEALTH AFF. BLOG (Dec. 5, 2014), http://healthaffairs.org/blog/2014/12/05/section-1332-
waivers-and-the-future-of-state-health-reform/; John McDonough, Wyden’s Waiver: State
Innovation on Steroids, 39 J. HEALTH POL. POL’Y & L. 1099 (2014).
80. See supra note 76 and accompanying text.
81. King v. Burwell, 759 F.3d 358 (4th Cir.), cert. granted, 135 S. Ct. 475 (2014).
82. U.S. DEPT. OF HEALTH AND HUMAN SERVS. ASPE ISSUE BRIEF: ADDENDUM TO THE
HEALTH INSURANCE MARKETPLACE: ARCH ENROLLMENT REPORT (Mar. 11, 2014), available
enrollAddendum.pdf (reporting that 91 percent of Arkansans selecting plans on the
Marketplace as of March 2014 have qualified for subsidies).