The Trump administration is letting states rewrite Obamacare rules to expand access to cheaper plans.

The administration issued regulatory guidance Monday that will allow for a range of changes to the Obamacare markets, billed as an opportunity to give people more options and to “mitigate the damage done by Obamacare.”

“Premiums are still much too high and choice is still too limited,” Centers for Medicare and Medicaid Services Administrator Seema Verma said in a statement. “This is a new day – this is a new approach to empower states to provide relief. States know much better than the federal government how their markets work.”

The guidance from CMS and the Treasury Department would expand the flexibility of Obamacare waivers that let states make changes to health insurance people buy when they don’t get coverage through work or a government program.

The mechanisms, known as “innovation waivers” under the Obama administration, were renamed “state relief and empowerment waivers” by the Trump administration on Monday.

Giving states more flexibility on their healthcare markets increases the prospects that people could get subsidies to buy short-term or association healthcare plans through the Obamacare exchanges. Both are less expensive than Obamacare plans, but also cover fewer benefits.

The guidance also raises the possibility that states will be able to make changes to the market that they have sought since President Trump took office. For instance, certain states have asked the Trump administration to allow them to move people from the Medicaid program onto the exchanges.

Other states have said that they preferred setting up high-risk pools that would fund medical care for the sickest customers in order to not have an effect on the rest of the Obamacare market and decrease premiums.

Verma, on a phone call with reporters Monday, declined to specify which proposals from states might be approved, but said states could make changes to how the subsidies under Obamacare are allocated and to whom.

She cited one example in which a state might give subsidies to younger people, who are more price-sensitive and likely to be healthier, so that they would enroll in the exchanges. Having more people from this group participate in the exchanges could help premiums go down for others.

Verma said the administration would provide “a menu of potential options” in the coming weeks for the types of changes states might consider.

“We will be outlining some options for states around how they can address high-risk individuals,” she said.

Eight waivers have been approved so far, seven of which were for reinsurance programs. The programs inject federal funding into the marketplace so that premiums fall, and helped stabilize the rates for the Obamacare market in 2019. Premiums are now expected to drop for the first time, by an average of 1.4 percent.

The current waivers that had already been approved had “barely touched the surface of what might be possible,” Verma said.

Though the guidance went into effect on Monday, it will likely take months or even until 2020 for states to see the changes.

Republicans have long talked about using the waivers as an escape hatch from Obamacare for states, but they will still face limitations under the law that the Trump administration cannot change, although the latest guidance des allow for governors to have more authority than they did previously.

The mechanism, also known as a "1332 waiver" after the relevant section of the law, comes with a specific process that entails several steps by both state lawmakers and the federal government, with an opportunity for public comment before finalization.

The latest guidance said that in "certain circumstances" governors could take actions on their own, and is supposed to help the waivers move faster.

But the applications still have to meet specific criteria to be approved. The changes states ask for cannot increase the federal deficit, and they cannot cause more people to become uninsured, increase the cost of coverage, or reduce benefits. They can be approved for up to five years, but must be renewed later.

Some blue states had looked at the waivers as an opportunity to set up single-payer healthcare systems that would cover all of their residents, but the proposals crumbled because of cost.

Under each administration, waivers are more likely to be approved or rejected depending on the priorities and politics of the moment. The administration earlier this year expanded the duration of short-term plans from 90 to nearly 12 months and expanded access to association health plans, which allow individuals and groups or small businesses to band together to buy insurance. The plans can exclude coverage for pre-existing conditions, such as cancer, diabetes, and asthma.

CMS said states must ensure that people, including those with pre-existing conditions, retain access to the same level of coverage available today without the waiver.

But Democrats have said that the proliferation of these types of plans will destabilize Obamacare’s insurance exchanges. Healthy people would leave the law’s exchanges for the cheaper short-term or association plans, leaving only sicker people in the insurance exchanges and driving up costs.

Sen. Ron Wyden, D-Ore., the top Democrat on the Senate Finance Committee who wrote the 1332 waiver section of Obamacare, said in a statement that the guidance went against what the provision was intended for.

“Today’s changes will let states run by conservative ideologues unilaterally push junk plans onto unsuspecting Americans and give insurance companies a windfall, all while leaving people with pre-existing conditions out in the cold,” he said.