Iowa’s Medicaid Expansion Proposal: A Step Forward, But Read the Fine Print

CCF and 22 other national groups submitted comments to HHS about Iowa’s two complimentary Section 1115 waivers: Iowa Marketplace Choice Plan and Iowa Wellness Plan.  Like my colleague Joan Alker wrote last week, Iowa’s proposal is not a simple Medicaid expansion like we saw earlier in the year, but a more complicated “round 2” approach to Medicaid expansion.

  • Iowa’s Wellness Plan proposal would require parents and other adults up to the poverty line to complete health improvement behaviors in order to be excused from paying monthly premiums that begin at 50 percent of the federal poverty level and cost 3 percent of their income.
  • Iowa’s Marketplace Choice proposal would require adults and parents at 101 to 133 percent of the federal poverty level to get coverage paid for by Medicaid in the health insurance marketplace.   Adults and parents would also pay 3% of their income toward premiums for this coverage. 

The proposals taken together are a step forward because they provide health coverage to low-income adults and parents with Medicaid.  But, when you read the fine print, there are two key elements of concern:

Concern #1: Iowa proposes to charge premiums for people starting at just above 50 percent of the federal poverty level (a family of 3 making $9,765 per year would pay $293 per year).  Our letter to HHS explains that premiums for adults and parents under the poverty line would set a new and dangerous precedent in the Medicaid program, and would be the first Medicaid demonstration project since the creation of a mandatory group of low-income individuals (under the Affordable Care Act) to require adults below the federal poverty level to pay premiums.  We urge that testing premiums on this group is not appropriate use of demonstration authority because experience already clearly and consistently shows that premiums decrease enrollment of very low-income beneficiaries. For more on this, see my blog post on recent data from Wisconsin that showed a steep drop in enrollment when the state imposed premiums.

Concern #2: Iowa plans to leave out Early Periodic Screening Diagnosis and Treatment services, for 19 and 20 year olds in both the Wellness and Marketplace Choice Plans.  As a result, 19 and 20 year olds would not receive vision, dental, or other EPSDT services required by federal law. Our letter asks HHS to leave 19 and 20 year olds out of the proposed waiver programs at this time.

Our joint letter asks CMS to conditionally approve the Iowa waiver so that low-income Iowans can receive coverage on January 1, 2014, while working out a way other than premiums for Iowa to pursue the goals of the demonstration projects.  The premiums would not start until the second year of coverage, which gives CMS and Iowa time to work on alternatives.

We also submitted more detailed comments along with the Center on Budget and Policy Priorities with additional concerns related to the proposals.  These concerns include the request to waive family planning and non-emergency transportation benefits; increased cost-sharing for non-emergency use of the ER; the lack of detail in the budget neutrality analysis; and the request to waive retroactive benefits.

Sonya Schwartz
Sonya Schwartz is a Research Fellow at the Center for Children and Families