The Obama administration said Tuesday it has approved a large part of Iowa’s proposed Medicaid expansion plan, an integral piece of the Affordable Care Act’s rollout in the state.
The approval, however, granted only part of the state’s request that it be allowed to charge a fee.
The state’s waiver request has been in the pipeline for weeks, and some groups and Iowa policymakers had been pushing the administration for action in recent days and weeks.
The approval, which came from the federal Centers for Medicare and Medicaid Services, would extend Medicaid to eligible Iowans who make up to 138 percent of poverty, or about $11,500 per year for an individual.
Meanwhile, those who make up to 133 percent of poverty, or about $15,900 a year, would get private insurance through the Affordable Care Act’s marketplace. Their premiums would be paid for by the government.
The waiver approval also allows Iowa to move ahead on an initiative aimed at encouraging healthier behaviors, and it would let the state charge a fee to people who make more than 100 percent of the poverty line.
The Iowa proposal had asked for approval to charge about a 3 percent premium on people who made more than 50 percent of the federal poverty line.
That fee, which would have amounted to about 3 percent of income, would be waived if participants engaged in certain healthy behaviors.
The administration’s decision gave approval for a fee to be charged only on those above the poverty line.
The state has 30 days to agree with the decision or propose an alternative.
Iowa Gov. Terry Branstad took a cautious view of the situation on Tuesday.
“We’ve had discussions with them that are inconsistent with that, and we want to make sure that it’s clarified,” Branstad told reporters. “… I want to see exactly what they’re talking about here, and I think we have to make sure that what we do, it complies with the agreement that we passed on a bipartisan basis in the Iowa Legislature.”
Iowa’s proposal was the product of a bipartisan compromise among legislative Democrats and Republicans, as well as the governor.
The governor initially resisted expanding Medicaid, arguing it exposed the states to additional future costs. But supporters of the law, as well as a coalition of the state’s hospitals and others, urged that the state go along.
State Sen. Jack Hatch, D-Des Moines, and a candidate for governor, urged Branstad on Tuesday to sign off on the approval.
Hatch said it was time to “stop worrying about scoring political points with the right wing of his party.”
Senate President Pam Jochum, D-Dubuque, an architect of the compromise, also urged the governor to sign.
“I encourage Gov. Branstad to accept this plan so we can continue to expand access to affordable health care to more than 150,000 working Iowans,” Jochum said.
Critics of the request to charge a fee say even though it might seem nominal to others, for those whose with incomes significantly below the poverty line, the out-of-pocket costs would be a hardship.
Branstad has said the state’s plan would encourage people to be more healthy. He’s argued that simply putting more people into what he’s called a flawed Medicaid program would be wasteful.
The state’s proposal would have waived the fee for the first year.
The administration’s waiver approval also was for only a year, so it’s possible the dispute could arise again even if the governor were to agree to the administration’s decision.
Under the Affordable Care Act, the federal government will pay all the costs of the expanded Medicaid program through 2016, after which reimbursement will gradually fall to 90 percent.
The administration’s approval comes just a few weeks before the end of the year and as politicians and advocacy groups began ramping up requests for a decision.
On Monday, a coalition of 16 groups had urged approval, saying 70,000 Iowans are in IowaCare, a limited benefits program, is scheduled to end at the end of the year.
Fifty thousand of those already had been deemed eligible to go into the new Iowa Health and Wellness Plan, the letter said.
Also, since Oct. 1, navigators and other counselors across the state have been busy signing up Iowans to the expanded Medicaid program, with the expectation coverage would begin in January.
(Reporter Rod Boshart contributed to this article)