Federal government approves most of Iowa's Medicaid expansion alternative

The U.S. Department of Health and Human Services has granted a waiver for Iowa’s alternative to the Medicaid expansion foreseen under the 2010 health care reform law. Governor Terry Branstad signed the Iowa Health and Wellness Plan compromise into law in June, and state officials submitted a formal request for a waiver in August. Iowa elected officials from both parties as well as many non-profit organizations with a stake in the outcome had urged Health and Human Services to approve the plan.

However, Governor Terry Branstad may appeal today’s decision, because federal officials rejected a provision he insisted on during negotiations with Democrats in the Iowa legislature.

After months of negotiations and a final push by a key Iowa Senate Democrat and an Iowa House Republican, state legislators approved a plan to allow Iowans with income up to 100 percent of the federal poverty level may enroll in Medicaid. Iowans whose income falls between 100 and 138 percent of the federal poverty level can choose a private insurance plan on Iowa’s exchange, with the federal government paying the premium charges (as it would do if Iowa had simply expanded Medicaid).

The final deal included a provision that was extremely important to Governor Branstad. He was determined to charge small monthly premiums to Iowans above 50 percent of the poverty level who did not take “responsibility” for their health by meeting certain wellness criteria, such as annual physicals.

I never understood why Branstad was so hung up on this demand. In an ideal world, everyone would embrace basic steps to stay healthy and catch problems early. But wealthy people who don’t comply with wellness criteria don’t have to pay an extra surcharge for their health insurance. The Medicaid program exists to cover people living in poverty. People making $11,500 a year or less don’t have disposable income, not even an $5 or $10 to pay toward a monthly insurance premium.

State Senator Jack Hatch, who was involved in the Medicaid negotiations and is now running for governor, spoke to the Des Moines Register today.

Hatch said he and other Democrats voted for a bill that included the monthly penalties because they were confident federal officials would reject that part of it. Hatch said federal officials objected to the proposal’s plan to kick participants off if they failed to pay their premiums in 2015. Such a punishment would be pointless, he said. “These are people who might have to choose between having a meal and paying the premium.”

The governor is seeking clarification from federal officials and still hopes to keep some monthly premium charge for certain Medicaid recipients.

Branstad spokesman Tim Albrecht released a statement Tuesday afternoon that suggested the governor believes there is some wiggle room on the issue. “The Branstad administration has had ongoing communications with U.S. Health and Human Services officials today,” Albrecht wrote. “The conversations have been productive and Gov. Branstad and Lt. Gov. (Kim) Reynolds are optimistic about a clear path forward including premium contributions promoting healthy behaviors, without loss of coverage, in accordance with Iowa law.  Conversations will continue on details needed for approval of the bipartisan Iowa Health and Wellness Plan.”

The law Branstad signed would potentially revoke coverage from Iowans who failed to meet wellness criteria and did not pay monthly premiums for Medicaid. Albrecht’s statement suggests that Branstad might settle for charging the premiums but not taking Medicaid away from those who don’t/can’t pay. I doubt Health and Human Services officials will agree to those terms.

Branstad has 30 days to decide whether to accept today’s decision or appeal it. He should accept it, because further delay puts low-income Iowans at risk. The IowaCare program that currently provides inferior coverage to nearly 70,000 people is expiring at the end of this month, and those people need to be either enrolled in Medicaid or in one of the private plans on Iowa’s insurance exchange.

Any relevant comments are welcome in this thread. I enclose below some Iowa political reaction to today’s news, and I’ll update this post as needed.

Statement from Senator Tom Harkin:

December 10, 2013

WASHINGTON, D.C. – Senator Tom Harkin (D-IA) today issued the following statement after learning that the Centers for Medicare & Medicaid Services of the U.S. Department of Health and Human Services (HHS) had approved the State of Iowa’s proposal to expand Medicaid.  The demonstration program is anticipated to extend Medicaid coverage to more than 100,000 additional Iowans.  The expansion will be 100 percent federally funded in 2014, 2015 and 2016, with the federal share dropping to no less than 90 percent in the years following.  Harkin is Chairman of the Senate’s Health, Education, Labor, and Pensions Committee.

“I am very encouraged by today’s announcement on Iowa’s Medicaid expansion.  The expansion is vitally important to Iowans who have already signed up, and the more than 100,000 who are eligible.  As we know with all compromises, however, neither side gets everything they want – that’s exactly what this is.  The two sides have spent many weeks negotiating – now is the time to move forward and give thousands of Iowans guaranteed access to dependable health care for the first time.  I only wish that this expansion came sooner to our State, which would have happened if Iowa had quickly accepted the Medicaid expansion provided by the Affordable Care Act, as many other states did.  If they had, Iowans would have avoided months of uncertainty and would already be enrolling.”

Statement from Iowa Senate President Pam Jochum, who floor-managed the bill outlining the Iowa Health and Wellness Plan:

“It’s great news for Iowa’s middle class families that the federal government has agreed to support the Iowa affordable health care compromise. I encourage Governor Branstad to accept this plan so we can continue to expand access to affordable health care to more than 150,000 working Iowans.

“The new Iowa Health and Wellness Plan has already enrolled some 60 to 70 thousand Iowans.  Thanks to this bipartisan effort, 150,000 working Iowans will soon be going to their own doctors rather than hospital emergency rooms when they need medical care.

“The result will be healthier Iowans, fewer home foreclosures and family bankruptcies due to medical bills, and lower health care costs for all Iowans.

Statement from State Representative Lisa Heddens, the ranking Democrat on the Iowa House Health & Human Services Appropriations subcommittee:

“Governor Branstad has a simple decision to make: either he stands with 150,000 Iowans who need health care or he leaves them behind because he didn’t get his way.  The only person playing politics here is Governor Branstad and 150,000 Iowans are waiting. I urge him to sign the waiver and end the uncertainty.”

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