Branstad signs Medicaid expansion alternative

Governor Terry Branstad signed into law today a bill setting Iowa’s health and human services budget for the next fiscal year and establishing a new “Iowa Health and Wellness Plan” for low-income Iowans not currently covered by Medicaid. The full text of Senate File 446 is available here. Division XXXIII contains the language on the Iowa alternative to expanding Medicaid, a compromise struck in the closing days of the legislative session last month.

After the jump I’ve posted some links and comments on today’s news. As far as I can tell, Branstad has not yet explained why he is happy to accept federal funding for the Iowa Health and Wellness Plan, likely to be more expensive than expanding Medicaid would have been. Earlier this year, he made a huge fuss about how we can’t afford such a program because of the federal deficit, and how we can’t trust the feds to live up to their funding promises.

I still have some questions about how the Iowa Health and Wellness plan will work, but here is the short version of the legislative compromise. Nothing will change for Iowans currently covered by Medicaid. Iowans not already on Medicaid who have income up to 100 percent of the federal poverty level will be eligible for the health insurance plan that covers most state employees, with benefits similar to what Medicaid offers. Anyone with income at least 50 percent of the poverty level with have to pay a small insurance premium, but there will be no co-pays for most services (only for non-emergency use of an emergency room).

In theory, Iowans whose income puts them between 100 percent and 138 percent of the federal poverty level will be able to buy private health insurance through the new state exchange, being created as part of the 2010 federal health care reform law. These people will also pay some kind of premium and could face financial penalties if they don’t adhere to certain wellness criteria, like going to regular check-ups and following advice from a doctor. I am confused about how that part of the system will be enforced–what if a person lost a little weight, but not as much as the doctor advised? How will the doctor be able to prove the person didn’t really quit smoking? I also wonder what will happen if the federal funds available aren’t sufficient to cover private insurance through the exchange for everyone in this group.

The Iowa Health and Wellness Plan could cover as many as 150,000 people, or roughly half of Iowa’s estimated population lacking health insurance. It should be a big improvement on the expiring Iowa Cares program, which currently offers inferior coverage to about 70,000 Iowans. Iowa Cares lacks mental health benefits and forces beneficiaries to receive care at one of two hospitals in the state.

Iowa will need to receive a waiver from the U.S. Department of Health and Human Services in order to implement this plan. That should not be a problem, given that the federal government already granted Arkansas a waiver for a Medicaid expansion alternative that would use federal funds to buy private insurance. State Medicaid Director Jennifer Vermeer said recently that talks with federal officials to work out the details of the Iowa Health and Wellness Plan are “going really well.” She will file a formal application for a waiver by the end of June.

O.Kay Henderson covered today’s bill signing for Radio Iowa and posted highlights as well as the audio. I was struck by this portion:

Branstad invited two key legislators from the north central Iowa area who came up with the compromise, billed as something different from traditional Medicaid coverage. Senator Amanda Ragan, a Democrat from Mason City, told the crowd she is “proud” of this bipartisan work.

“Today we will codify our best effort with the signining of the Iowa Health and Wellness Plan,” Ragan said. “Ultimately an additional 150,000 of our fellow Iowans will be able to receive health care at reasonable and affordable cost through an improved care delivery system.”

House Republican Leader Linda Upmeyer of Clear Lake said it was a “challenge,” but by focusing on areas of agreement, she and Ragan were able to craft a compromise.

“This will promote wellness,” Upmeyer said. “We do see this as a better plan than simply expanding a decades-old and a bit archaeic system that we currently have.”

Senate President Pam Jochum also went out of her way last month to give credit to Ragan and Upmeyer for forging the compromise. Upmeyer wasn’t even assigned to the conference committee that was making a deal on Medicaid expansion. Ragan is up for re-election next year in Senate district 27, and this achievement is likely to be a centerpiece of her case for a fourth term.

Any relevant comments are welcome in this thread. Senate File 446 also included new language allowing Branstad to approve or reject Medicaid paying for an abortion in cases of rape, incest, danger to the mother’s life, or severe fetal abnormality. That provision will be the subject of a separate Bleeding Heartland post. Branstad allowed that language to go into effect. There had been some speculation that he might use his line-item veto power to strike it.  

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