About 100,000 Iowans newly eligible for Medicaid are set to get private insurance coverage through a demonstration project approved by the federal government, the second Medicaid "private option" okayed this year.
The Centers for Medicare & Medicaid Services largely met Iowa Governor Terry Branstad halfway on his proposal to expand Medicaid under the Affordable Care Act through the state-federal partnership insurance exchange.
The Iowa Health and Wellness Plan, brokered by Branstad, a Republican, and a Democratic legislature, was originally designed to have non-medically frail beneficiaries earning between 50 percent and 133 percent of the federal poverty level pay sliding-scale premiums to enroll in HIX health plans.
Unwilling to go that far, CMS is allowing those earning between 100 percent and 133 percent FPL to enroll in private plans and pay small premiums. (That in itself is somewhat precedent-setting; the Arkansas waiver approved earlier this year for a similar Medicaid-expansion-via-HIX does not include premiums for beneficiaries selecting qualified health plans.)
According to conditions CMS approved, those premiums, limited to 2 percent of beneficiaries incomes, won't be applied until the second year of the demonstration, running through the end of 2016. The premiums also won't applied at all if beneficiaries participate in a prevention and healthy behaviors incentive program -- one of several policies the demonstration is testing, to see if waived costs for wellness is a significant motivator for Medicaid populations.
The Iowa Department of Human Services still has to submit criteria for the wellness program, along with a lot of other policy details for the federal waiver, by the end of March 2014, but according to the state's proposals, the program will probably require a health risk assessment and an annual physical as part of the requirements for eliminating the premiums.
CMS also approved another sort of incentive policy that'll be included in the demonstration: co-pays for emergency room visits when the beneficiaries turn out not actually needing emergency care, with out-of-pocket costs are limited to up to five percent of income.
In addition to that and the wellness program, from the federal government's perspective, the demonstration is supposed to help determine whether individual private health plans and third party payment at market rates will offer adequate continuity of coverage and whether other deviations from traditional Medicaid policy don't adversely impact care.
In the first year, Iowa will not have to offer the Medicaid-exchange beneficiaries a service that's long been a part of Medicaid, non-emergency transportation services for beneficiaries to get to and from appointments -- something qualified health plans in Arkansas will have to offer.
The qualified health plans beneficiaries will be able to select will have to be determined by the Iowa Medicaid Enterprise agency, and all of the roughly 100,000 Iowans eligible for the demonstration program will have to have the choice of at least two silver plans.
With open enrollment ending in March, Iowa health officials will now have a very busy end of the year and beginning on the new year working with health plans and providers to set up memoranda of understanding and to set up data sharing, IT configuration and reimbursement procedures.
CMS's okay of Iowa's plan should also bolster other Governors, including Republicans in Pennsylvania and Michigan, that are seeking similar waivers to pursue more market-based approaches to Medicaid expansion.