NCSL - National Conference of State Legislatures
04/02/2026 | Press release | Distributed by Public on 04/02/2026 13:13
State Roles Using 1332 Health Waivers
Related Topic: Health
Explore key content...
Key Takeaway
-
Many states have applied for and implemented Section 1332 waivers as a way to control the cost of health insurance plans purchased from the individual or small group marketplaces.
As state policymakers look to manage rising health insurance premiums and enhance affordable coverage options, many states have applied for and implemented Section 1332 waivers. Section 1332 of the Affordable Care Act allows states to waive certain ACA requirements such as the structure of cost sharing reductions or the specifics of essential health benefits benchmark plans, in order to customize their health insurance systems to better meet the state's needs while maintaining compliance with established ACA standards. States must seek federal approval for a Section 1332 waiver from the Centers for Medicare and Medicaid Services (CMS). The waivers were first made available in 2017.
State Action on Section 1332 Waivers
As of January 2026, 21 states have received approval for Section 1332 waivers. CMS recently granted New York's request to terminate its currently approved waiver effective July 2026.
At least 13 states have enacted legislation authorizing a Section 1332 waiver application but do not have currently active waivers. After previously receiving federal approval for a Section 1332 waiver, Colorado and Maine enacted legislation to seek an additional waiver or amend their waivers.
State Action on Section 1332 Waivers
Some states withdrew their waiver application or CMS deemed their application incomplete. For a list of these states, please visit the CMS website.
Some states withdrew their waiver application or CMS deemed their application incomplete. For a list of these states, please visit the CMS website.
Created with Highcharts 12.5.0Chart context menuState Action on Section 1332 WaiversSome states withdrew their waiver application or CMSdeemed their application incomplete. For a list of thesestates, please visit the CMS website.ALAKASAZARCACOCTDEDCFLGAGUHIIDILINIAKSKYLAMEMDMAMIMNMSMOMTNENVNHNJNMNYNCNDMPOHOKORPAPRRISCSDTNTXVIUTVTVAWAWVWIWYCopyright (c) 2022 Highsoft AS, Based on data from Natural EarthHighcharts.com © Natural Earth
End of interactive chart.
Switch View
- Approved
- Pending
- Enacted Legislation
- Enacted Legislation and Approved Waiver
Modal title
×How States Are Using Section 1332 Waivers
According to State Health and Value Strategies, at least 19 states have leveraged Section 1332 waivers to seek federal approval and pass-through funding for state-based reinsurance programs , which aim to lower health insurance premiums for plans sold in the individual insurance marketplace. A reinsurance program is a reimbursement system that protects insurers from high medical claims for beneficiaries with complex and costly medical needs. It usually involves a third party acting as an insurer for the insurance company by paying part of a claim once it surpasses a certain amount, or by covering part or all of the claims for individuals with pre-determined, high-cost conditions.
Reinsurance programs are funded by a mix of state and federal dollars. Through a Section 1332 waiver, states receive federal pass-through funding-or the amount the federal government saves in premium subsidies resulting from the reinsurance program. States then provide additional funding for the reinsurance programs from several sources, including assessment fees on insurers and providers or state general funds.
Beyond reinsurance programs, states can use 1332 waivers for a variety of other purposes-such as waiving requirements for how states operate their insurance marketplaces. For example, Hawaii's waiver allows the state to cease operation of the ACA's Small Business Health Options Program (SHOP), which conflicts with certain elements of a long-standing state law requiring small and large employers to provide comprehensive coverage beyond ACA requirements. The waiver also allows the state to receive federal pass-through funding equal to what the state would receive in small business tax credits if it were to operate SHOP.
Washington also uses a 1332 waiver for insurance initiatives unrelated to reinsurance. Washington's 1332 waiver allows all Washington residents, regardless of immigration status, to enroll in qualified health plans and qualified dental plans through the state exchange. Washington's waiver allows all Washington residents to potentially be eligible for state subsidies that lower premium costs. The waiver allows eligible residents to enroll in a single health plan with a single deductible along with their eligible family members through the same shopping and enrollment process. Washington's waiver also allows residents with incomes below 250% of the Federal Poverty Level (FPL) to be eligible for the state subsidy program named Cascade Care Savings, even if the resident is not eligible for the federal premium tax credit.
New York's Section 1332 waiver was approved in September 2024, set to run from Jan. 1, 2025, through Dec. 31, 2028. The waiver expanded eligibility for health coverage through the state's Essential Plan, similar to a Basic Health Program, for individuals with incomes up to 250% FPL. However, with the changes H.R. 1 made to premium tax credit eligibility, New York now expects to receive reduced federal funding for the program and requested to terminate its waiver. In March 2026, CMS approved New York's request.
In 2020, Georgia received approvalfor a two-part 1332 waiver. First, CMS approved and provided pass-through funding for a reinsurance program beginning in 2022. Additionally, CMS authorized the state to exit the federally facilitated marketplace and instead operate a decentralized, private-sector enrollment platform run by web brokers and insurers. The second part of Georgia's waiver creating the decentralized enrollment system was suspended by the federal government in 2022. In 2024, Georgia transitioned from a federally facilitated marketplace to a state-based marketplace known as Georgia Access, though not the same as the decentralized enrollment system proposed previously.
ce, the second part of Georgia's waiver was suspended meaning Georgians looking for marketplace health care will still be directed to purchase off HealthCare.gov.
Federal Approval Process
To pursue CMS approval of a Section 1332 waiver, states must develop and post a draft application for public comment and input. State legislation authorizing a certain entity-such as a state department of insurance or governor's office-to apply for a waiver is also often required.
Additionally, states must demonstrate through actuarial analysis how their Section 1332 waiver application meets the following statutory requirements, or "guardrails:"
- Provides coverage that is at least as comprehensive as would be provided without the waiver.
- Provides coverage and cost-sharing protections against excessive out-of-pocket spending that are at least as affordable for the state's residents as would be provided absent a waiver.
- Provides coverage to at least a comparable number of state residents.
- The proposal will not increase the federal deficit.
Since the implementation of Section 1332 waivers, there have been several changes in federal regulation and guidance across administrations. The current rules governing 1332 waivers may be found at 31 CFR Part 33 and establish processes for state and federal public notice and comment, waiver applications and disclosures, state reporting and ongoing federal evaluation of approved waivers.
NCSL - National Conference of State Legislatures published this content on April 02, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 02, 2026 at 19:13 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]