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Iowa Medicaid Expansion Moves Forward with CMS Waiver Approval

Iowa received federal approval this week to expand its Medicaid program on January 1, 2014. The Hawkeye State could cover as many as 190,000 more residents through the expansion, named the Iowa Health and Wellness Plan. ITUP applauds the news that Iowa and the federal Centers for Medicare and Medicaid Services (CMS) have made great strides toward expanding Medicaid coverage to nearly one in fifteen Iowans.

Governor Terry Branstad, a Republican, requested a federal waiver to implement the expansion in a relatively novel way. The Affordable Care Act authorized new Medicaid coverage for all individuals at or below 138% of the federal poverty level (FPL), a little less than $16,000 for an individual and $32,500 for a family of four. Yet, Iowa will have its newly eligible Medicaid beneficiaries enroll in commercial plans offered through its new health insurance Exchange. The state will use the federal premium and cost-sharing assistance available to enrollees in the Exchange to pay for the commercial health plans’ benefits, and the state will also ensure access to additional benefits included in its Medicaid benefit package. Arkansas also received CMS approval for a similar Medicaid expansion approach.

CMS approved Iowa’s waiver to allow the premium assistance model, but with some minor adjustments to the state’s original request to charge new Medicaid enrollees a premium for their Exchange coverage. In its waiver application, the state had requested permission to charge premiums for new enrollees above 50% FPL ($5,745 in annual income for an individual, $11,775 for a family of four). CMS approved the premium proposal, but only for individuals with income above 100% FPL ($11,490 for an individual or $23,550 for a family of four). Premiums can be no greater than 2% of beneficiaries’ household income.

As the name of the waiver suggests, Iowa also included a wellness program with healthy behavior incentives for expansion beneficiaries. The incentives include an annual health risk assessment and wellness exam. The state will waive program premiums for beneficiaries above 100% FPL if they complete the healthy behavior requirements. If participants elect not to participate in the wellness program, the state will charge those individuals a premium for their coverage beginning in the second year of the expansion.

One contentious element of Iowa’s proposal was a request to waive a federal Medicaid requirement to cover non-emergency transportation to health care providers. The exclusion of this benefit could be a considerable barrier to care for Iowans with low incomes who may have difficulty paying for transportation. CMS approved this request for one year only, and the approval requires the state to evaluate the impact of the exclusion of the benefit at the end of that year.

Governor Branstad will now decide whether or not to accept the terms of CMS’ approval of the waiver. The proposed coverage expansion is a wise investment in Iowans’ health and quality of life, and we hope to see Iowa implement the waiver in the new year.


For the Des Moines Register article, click here.

For the take from the Georgetown University Health Policy Institute Blog, click here.

For the text of the waiver, click here.

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