Feds reject Iowa charging premiums to poor Medicaid members

The U.S. Department of Health & Human Services approved Iowa's partially privatized plan to expand Medicaid, which is more stringent than other states, but it rejected part of the plan that would have required poor Medicaid members to pay premiums.

Iowa's plan, which was championed by Gov. Terry Branstad, includes full federal funding for its Medicaid program starting next year through 2016, dropping to 90 percent funding thereafter. The state will place up to 150,000 people who aren't currently covered by Medicaid into the new Iowa Health and Wellness Plan, reported the Des Moines Register.

To help expand coverage, Iowa will buy private insurance and charge premiums to members if they don't participate in certain wellness programs or meet health goals, including obtaining yearly physicals, MarketWatch reported.

Although HHS rejected Branstad's proposal to charge premiums, he insisted it was a crucial aspect of the plan. "The whole difference in our approach is we want people to take some ownership of their own health," he said after HHS announced its decision, according to the Associated Press.

Because of his focus on the premiums, it's not clear whether Branstad will accept the terms as approved. He has 30 days to make a decision, the AP noted. "I want to know the facts and see exactly what they're talking about here," Branstad said. "I want to make sure what we do complies with the agreement we passed on a bipartisan basis with the Iowa Legislature."

Branstad's spokesman said the governor's office is still negotiating with the White House, suggesting a solution might include charging premiums without kicking people out of Medicaid if they fail to pay, the Register noted.

Iowa is one of five states considering alternative plans to the traditional expansion of Medicaid. Arkansas was the first to win federal approval for its private option plan; Tennessee is still working on negotiating a unique kind of Medicaid expansion that would enroll the state's poor consumers into the federal exchange. Meanwhile, Pennsylvania and Michigan lawmakers have been working on similar private options.

To learn more:
- see the Des Moines Register article
- read the Associated Press article
- check out the MarketWatch article