Agency Imprimatur & Health Reform Preemption

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At this moment, there exists nearly unanimous agreement that the American health care system requires reform, but also vehement disagreements over what form regulation should take and who should be in charge of regulating—state or federal authorities. Preemption doctrine typically referees disputes between federal and state regulatory efforts, but it also exacerbates them. There exists nearly as unanimous opinion that preemption doctrine in health law is a mess. This Article identifies an inventive structure that may help defuse some preemption problems in health reform.

The Affordable Care Act’s (ACA) individual and employer mandates, health insurance exchanges, and insurance coverage standards established preemptive federal baselines for health insurance regulation. Yet the ACA also permits states to apply for a waiver of all these baseline provisions, if they promise to enact state legislation with equivalent protections. Through this waiver provision—the “section 1332” or “state innovation” wavier—the federal agencies may sanction state variations if the agencies find suitable evidence that the variations will further the goals of the federal baselines.

The ACA’s combination of express preemption and guided waiver raises a novel confluence of “big waiver” theory and preemption doctrine. This Article posits that this confluence offers an “agency imprimatur” model that has great potential for managing health law federalism issues by circumventing conflict. At its best, the agency imprimatur model offers advantages over preemption in expertise, transparency, and communicative federalism. These potential advantages, however, hinge on the presence of meaningful waiver standards that preserve the statutory priorities and require reliance on agencies’ substantive expertise. The section 1332 wavier is not without its pitfalls, but the recently proposed mega-waivers would erode all of these potential gains.


Originally published in 2017 by Ohio State Law Journal.