The “Iowa Compromise”: Reaching agreement on the Medicaid Expansion for Iowans

July 26, 2013
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Iowa will do the Medicaid Expansion, but in a more elegant way.

Amazing! Truly amazing! Every so often, we observe an exceptionally fine, noteworthy example of the art of political compromise. Much rarer, indeed, is when that example produces a result that is considerably better than either of the original positions. When both outcomes occur, we really marvel. The art of political compromise still is actually possible in the United States. And it can produce exceptionally good outcomes.

Such an instance occurred very recently in Iowa. For more than a year, Republican Governor Terry Branstad emphasized and reiterated that he would not permit Obamacare’s Medicaid Expansion in Iowa. He had far too many unanswered questions. It would just not be good for Iowans. In its stead, the Governor proposed further work on the Iowa Healthiest State Initiative (see http://www.iowahealthieststate.com/) to increase the wellness of the population by addressing smoking, obesity, high blood sugar, etc. In lieu of the Medicaid Expansion, the Governor wanted to offer commercial insurance to newly insured persons, who would pay either a monthly fee or insurance premiums, depending upon income level, which would be reduced or eliminated if they participated in appropriate prevention and wellness activities.

On the other hand, the Democratic Senate Majority Leader, Mike Gronstal, argued eloquently that Iowa needed the Medicaid Expansion. Many Iowans were without health insurance, and a large number of those who were uninsured were very poor. The federal government would pay 100% of the cost of the Medicaid Expansion for 2014-2016, and then an amount decreasing to 90% by 2020, which would remain the permanent federal contribution. Obamacare’s Medicaid Expansion would be a very good deal for Iowa and for Iowans!

Throughout the year, skirmishes occurred between the Governor and the Senate Majority Leader, but no action was taken. Both reiterated their original positions. To all appearances, the issue was stalemated.

Then, very early in June, the tenor changed just a few short days before the end of Iowa’s legislative session. Time was running out as well on the decision to participate in the Medicaid Expansion during 2014. If this deadline were missed, the 2014 federal funds for the Medicaid Expansion would be lost permanently. Negotiations ensued between the Governor and the Senate Majority Leader. Both gave up part of their strongly-held positions in return for retaining something else.

What came out of this period of negotiation? Simply, Iowa will do the Medicaid Expansion, but in a more elegant way. The key features of the new Iowa Health and Wellness Plan:

Ø      Uninsured persons up to 100% of the federal poverty level (FPL) will participate in the Medicaid Expansion through the Iowa Wellness Plan (see http://www.dhs.state.ia.us/uploads/IAWellnessPlanDraft1115.pdf ). Their Alternative Benefit Plan will be benchmarked to the benefits offered to Iowa state employees. Medically frail persons between 101 and 133% FPL will be able to choose traditional Medicaid or opt into the new Plan. This new Plan will encompass care coordination, managed care, and the creation of Accountable Care Organizations (ACOs).  

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