Uncertain prognosis for Iowa's health care plans

Work continues as deadline approaches for federal health exchange blueprint

DES MOINES — The diagnosis for action by the Iowa Legislature on health care issues this session is inconclusive.

Iowa enters the week facing a mid-February deadline for submitting a blueprint on how state officials envision operating a health insurance exchange in partnership with the federal government. Exchanges are online sites where small businesses and people who aren’t insured at work will be able to shop for health insurance starting in 2014.

As envisioned under President Obama’s Patient Protection Affordable Care Act, individuals and small businesses would use the new framework to shop for health insurance among competing private plans and obtain federal subsidies to help defray the cost.

States are to notify the federal government by Friday if they want to help with selected tasks, like consumer assistance and the supervision of health plans, in partnership with the federal government.

Gov. Terry Branstad has notified federal officials that Iowa prefers a state-federal partnership and Michael Bousselot, Branstad’s policy adviser for health issues, said Iowa officials will submit a proposed blueprint — to be certified by March 1 — that will maintain and retain current state management and regulatory responsibilities of Iowa’s insurance market as well as control of the Medicaid eligibility system that connects with the federal government portal.

The federal government will handle the exchange website and information technology platform that interfaces with the federal portal and the Internal Revenue Service database. This will provide users with real-time income and tax information and enroll them into a qualified health insurance plan or Medicaid program with access to eligible tax credits, he said.

“We’re going to maintain control of certain areas and the federal government will run certain things,” said Bousselot. “We’re going to maintain and do the things that basically the state of Iowa has done for a long time: regulate insurance and regulate the eligibility and intake of new people into our Medicaid rolls. What the federal government is going to do is kind of the stuff that the state of Iowa would have a tough time having ready by Oct. 1.”

Open enrollment for exchange plans begins Oct. 1 for coverage starting on Jan. 1, 2014, when most Americans will be required to have insurance.

Sen. Jack Hatch, co-chairman of the House-Senate health and human services budget subcommittee, disagreed with Branstad’s decision to proceed with a partnership rather than a state-run exchange. Hatch, a Des Moines Democrat who is possibly the Legislature’s top expert on health care policy and is weighing a bid for governor in 2014, also has been critical of the governor for not providing state lawmakers with information on the proposed exchange.

House Speaker Kraig Paulsen, R-Hiawatha, said he believes the governor’s decision to pursue a federal-state partnership does not require any legislation and he does not anticipate debating exchange legislation this session.

“The governor argues that the partnership gives us more flexibility and is cheaper for the state and that is just flat-out wrong. It doesn’t give us more flexibility. It restricts us,” said Hatch, who has introduced a different Senate plan that seeks to switch to a state-run exchange by 2015. “He’s trying to create an argument to defend his bad decisions on health care over and over again.”

Branstad spokesman Tim Albrecht disagreed, saying the partnership enables the state to run its health care system more efficiently while maintaining the flexibility of expanding to a state-based exchange in the future or pulling back if need be.

“It’s going to be see-as-we-go,” said Bousselot. “I think it’s going to be a challenge, but we shall see. It’s the brave new world of health care reform implementation.”

Medicaid plan

The other health care reform issue facing legislators this session hinges on whether to expand the Medicaid program to cover another 150,000 Iowans.

Starting Jan. 1, 2014, the new law expands Medicaid eligibility to people making up to 138 percent of the federal poverty line, or about $15,400 for an individual. Under the law, the federal government will pay the full cost of the expansion the first three years, from 2014-2016. Thereafter, the federal share gradually phases down to 90 percent, still much more than the government pays for the rest of Medicaid.

Branstad, citing concerns about the cost, has rejected the idea, but Democratic lawmakers are calling for the expansion.

“The governor is fighting battles about health care that were settled two years ago,” said Rep. Tyler Olson, D-Cedar Rapids, who also recently was named chairman of the Iowa Democratic Party. “He is opposing health insurance for 150,000 Iowans. We’re focused how do we expand access to health care.”

Senate President Pam Jochum, D-Dubuque, said a Senate subcommittee will begin work Monday on a proposal to expand Medicaid coverage in Iowa. She expected the panel would hold another meeting Feb. 25 before moving the bill to the full Senate Commerce Committee.

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