States are the key to both strengthening and replacing the Affordable Care Act.

The prevailing view among health policy experts seems to be that today’s political polarization means yearsof trenchwarfare areahead for theAffordable Care Act (ACA). According to this gloomy view, a messy stalemate is assured for years to come. I’m not so sure. I believe the states can and will become the vehicle—both politically and technically—for an era of progress inwhicheachpolitical sidecangenuinelydeclare victory. For its part, the Obama Administration has been grantingwaivers from regulations toencourage resistant conservativeandRepublican states to adopt some variation of Medicaid expansion and other features of theACA.States likeArkansas, Indiana,Ohio, and Pennsylvania are among those at variousstagesofusingornegotiatingsuchwaivers. A recent report on ACA implementation in theSouth indicates that several states opposing the ACA emphasize practical issues rather than ideological opposition. Moreover, by being open to a “private option” forMedicaidcoverage,ornewformsof health exchange, even states like Texas mightembraceversionsofsomeof theACA’s core coverage objectives if granted adequate waivers. Still, thewaytothinkaboutawaiverprocess is not as merely a tool to bring a few more states on board the ACA. Rather, it should be seen as central to a vision of how future health reform might evolve. This vision starts with agreement on basic goals and values—many of which are actually shared by both proponents and opponents of the ACA. It then allows states much greater flexibility in pursuing those goals, either within the architecture of the ACA or outside it. What does this look like, operationally? At a minimum it looks like a continuationof today’s limitedwaivers for states.The current approach is likely to induce some more Republican states to line up behind some features of theACA, suchasMedicaid expansion.And itwill serve as a safety valve for those Democratic states that are unhappy with certain features of the law. However, beginning in 2017, a less talked-about provision of the ACA takes effect that could be the game changer, coincidentalwiththe inaugurationofanewpresident. Section 1332, the “Waivers for State Innovation” takes effect. Added to the ACA duetotheeffortsofSenRonWyden(D,Ore), the section allows states to request sweeping changes to the ACA’s standard provisions, includingexemptions fromtheessential benefits package and other benefit details, fromthe requirement tohaveanexchange, fromthe individualandemployer insurance mandate, and from other central elementsof current law.Tohaveachanceof getting thatwaiver, however, the statemust propose a plausible plan to achieve at least thesame level andqualityof coverageas the ACA at no net increase in cost to the federal government. In effect, this provision of the ACA means that if a state can reach the goals of the ACA by replacing (without Congress technically repealing)majorpartsof theACA, then it canget agreen light togoahead.The provision allows states to include in the waiver mixing bowl elements of the Children’sHealth InsuranceProgram(CHIP)and even Medicare, as well as “any other Federal law relating to the provision of health care itemsor services.” The scope is breathtaking. Little wonder John McDonough, DrPH,MPA, of theHarvard School of Public Health and a former top health advisor to SenEdwardKennedy (D,Mass) and theSenatehealthcommittee,describessection1332 as unleashing “state innovation on steroids.” Vermont sees thisprovisionasapath to a single-payer system, and is actively planning for a 1332 waiver. But as McDonoughandotherspointout, section 1332 would also allow other states to pursue a wide range of options favored by conservativeDemocraticstatesandRepublicanstates that are unhappy with the ACA. So there is likely to be an increasing focusonpreparing for section 1332during the next 2 years, and a stronger emphasis after the2016election.Forone thing, therecould bebipartisan legislativemoves toallowsection 1332 to take effect earlier and let states avoid the ACA’s unpopular mandates. A bipartisan effort to do that during the passage of the ACA failed but was endorsed by President Obama. Expect another push in the next Congress.