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Iowa Health & Wellness Plan Waivers Requested

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After five public hearings and a two-month period for written testimony, the Department of Human Services (Iowa Medicaid Enterprise) and Governor Terry Branstad submitted their Iowa Health and Wellness Plan to the Federal government.  The Federal government must now decide whether Iowa will be allowed to use federal Medicaid funds to pay for the plan, which also asks for permission to waive (that is, not pay for) some Medicaid required services.

The federal Affordable Care Act (aka "ObamaCare") allowed states to expand their Medicaid programs to include any low-income individuals or families earning up to 138% of the federal poverty level.  That’s $15,414 for an individual or $31,809 for a family of four.  But Iowa took a different approach - the Iowa Health and Wellness Plan.

The Governor and most Republicans in the Iowa Legislature didn’t want to expand Medicaid to cover additional people; Democrats did.  Instead, they passed a compromise (the Iowa Health and Wellness Plan) that expanded Medicaid to people earning up to 100% of the federal poverty level, and paid for private health insurance for people earning between 101-138% of the federal poverty level. 

While both plans will cover “essential health benefits” outlined by the federal Affordable Care Act, they do not pay for the same services that our traditional Medicaid program does. Because Iowa didn't do a straight Medicaid expansion to cover low-income Iowans (and because our Legislature didn’t allow the same package of benefits currently offered by Medicaid), the state must ask the federal government for permission. 

The Iowa Health & Wellness Plan is divided into two separate components:

  • The Iowa Wellness Plan, which expands Medicaid to provide benefits like those state employees get for Iowans earning up to 100% of the Federal poverty level (FPL), and those considered Medically Frail and earning up to 138% FPL.

  • The Marketplace Choice Plan, which allows a person or family earning between 101-138% FPL to choose a private health insurance plan offered by one of the insurers that has agreed to participate in the federal health care reform “exchange,” or for people earning up to 133% FPL with employer-sponsored health insurance (to help pay for premiums).

As mentioned before, the state has decided to provide a package of benefits that is different than that currently offered through Medicaid.  It is important to remember that current Medicaid programs are not changed – benefits remain the same and do not affect current recipients, new applicants or those on waiting lists.  The changes to the benefits offered only apply to the newly eligible population – people who are eligible just because of their income and do not meet any other requirements of Medicaid (disabled, elderly, or have child living with them).

The state is asking for waivers for these new plans so that it will not have to pay for two required Medicaid services - non-emergency transportation and EPSDT (Early, Periodic, Screening, Diagnostic Treatment, which is the child health component of Medicaid and is designed to improve the health of low-income children). 

Waivers are also requested so premiums can be charged to people in the Marketplace Choice Plan who fail to comply with certain "healthy behaviors” (like getting an annual physical). Medicaid does not usually allow premiums. There are other waiver requests included, but health care groups cite these three as potentially creating access barriers. 

We will continue to follow this issue, including how to sign up, who will be available to help you sign up, and where you can submit public comment on the waiver application.   Watch for updates, and go to our policy tools to read the Governor's letter to US Health & Human Services Secretary Kathleen Sebelius, review the waiver requests pending federal approval, find out more about the Affordable Care Act, and more.