Reform Update: CMS approves Iowa's Medicaid expansion plan

The CMS has approved Iowa's demonstration to expand Medicaid coverage to adults earning up to 138% of the federal poverty level by letting the state use federal money to buy them private coverage through the state insurance exchange, the agency announced Tuesday.

It's the second state after Arkansas to win federal approval for this type of alternative Medicaid expansion model. Republican-led states such as Iowa have been resistant to expanding traditional Medicaid under the Patient Protection and Affordable Care Act. The private plan model was proposed in Arkansas and Iowa to soften conservative opposition to expanding Medicaid to low-income uninsured adults, which hospital leaders around the country strongly support.

The waiver demonstration will extend Medicaid coverage to more than 100,000 additional Iowans, and the expansion will be 100% federally funded in 2014, 2015 and 2016, with the federal share dropping to no less than 90% in the years following. The CMS said expansion improves care, promotes health and allows the state to take advantage of the generous Medicaid funding made possible by the Affordable Care Act.

“Iowa has pioneered innovative, state-based solutions for Medicaid expansion, and we are pleased to grant this waiver,” said Marilyn Tavenner, administrator for CMS. “CMS stands ready to work with other states to explore options that aim to improve care and lower costs in the Medicaid program.”

The waiver approvals the CMS granted Iowa include virtually all of the initiatives the state has proposed. They will allow the state to buy coverage for Medicaid-eligible adults with incomes from 100% to 138% of the poverty level through private plans on the federally run insurance exchange in Iowa. Further, these approvals provide Iowa with the flexibility it requested to create a healthy-behaviors initiative for people in the expansion population and to charge premiums for people with incomes above 100% of the federal poverty line. Finally, the state can move ahead on its proposal to test innovative payment reform ideas that promote care coordination, lower costs and better quality care.

Under the state's proposal granted Tuesday, adults with income at or below 100% of the federal poverty line and medically frail people will receive coverage under traditional Medicaid.

The CMS stressed that it wants to work with other states that so far have not expanded Medicaid and give them flexibility to pursue similar alternative coverage expansion plans. Pennsylvania recently submitted a similar waiver proposal, though it includes controversial conservative provisions including requiring beneficiaries to participate in work training programs and requiring people with incomes under 100% of poverty to pay a premium. Almost half the states have not expanded Medicaid under the healthcare reform law.

—Harris Meyer

The Obama administration has begun to reach out to states to inform them that Medicaid expansion presents a pathway to consistent care for the thousands of political refugees in the U.S.

HHS' Office of Refugee Resettlement sent out two letters Friday to help state agencies determine eligibility of refugees for Medicaidand provide guidance on transferring those now covered under the Refugee Medical Assistance (RMA) program to Medicaid.

Each year, between 60,000 to 70,000 refugees are admitted into the U.S. Of those, roughly a third are eligible for medical assistance because the program is limited to those who are ineligible for Medicaid or Children Health Insurance Programs—typically because they are joining family members whose collective income disqualifies them for Medicaid or they don't have dependent children.

HHS expects the vast majority of newly arriving refugees to be eligible for Medicaid in states that are expanding under the Patient Protection and Affordable Care Act.

State officials in states expanding their programs should evaluate the income of evacuees in their territories to determine if they can transition from RMA to Medicaid, HHS says in the letter. The agency was unable to provide an estimate of the number who will gain coverage because standards vary by state, a spokeswoman said.

Medicaid expansion “is good news because the coverage (refugees) are going to receive is going to be more comprehensive than what was available in the past,” said Stewart Landers, a senior consultant at John Snow Inc., a public health management consulting and research organization focused on issues affecting refugees.

The most critical health need for refugees is mental health services, Landers said, because of trauma of the circumstances that caused them to flee the considerable emotional distress of leaving their homes.

A July 2013 Center for Disease Control and Prevention study found that the suicide rate among refugees from the South Asian country Bhutan was at 21.5 per 100,000, compared with 12.4 per 100,000 among the general U.S. population.

While there is coverage under RMA for mental health services, enrollment in the program lasts only eight months.

—Virgil Dickson

Arkansas's Surgeon General Joe Thompson is questioning the utility of a controversial component of Pennsylvania's tentative plans for Medicaid expansion dollars: that beneficiaries prove they are employed or searching for work.

Last week, Pennsylvania Republican Gov. Tom Corbett posted a draft copy of an application for a Medicaid waiver that, would allow the state to collect federal Medicaid funds to help low-income residents buy coverage in the health insurance exchange established under the Patient Protection and Affordable Care Act.

The plan has been compared to a similar waiver obtained by Arkansas, but there are several key differences. While both states' plans call for steering new Medicaid beneficiaries into private insurance plans, for example, Pennsylvania's plan would collect monthly premiums from those who make more than 50% of the federal poverty level and includes the work requirement.

Thompson questioned the need for such a provision as long as the participant met the ACA's financial requirements to be on Medicaid.

“When we looked at our population, a large portion were low income, but working a job that was not offering health insurance coverage, or a wage where they could not afford coverage without assistance,” Thompson said during a briefing on Medicaid expansion hosted by Robert Wood Johnson Foundation on Tuesday.

To date, 77,000 newly eligible Arkansas residents have applied to get coverage, and 59,000 have been successfully enrolled into a plan as of the end of November, Thompson said. In addition, 2,800 children who were already eligible, but not enrolled in the state's Children's Health Insurance Program (CHIP) program have now been added to the state's rolls.

—Virgil Dickson

HHS estimates that six out of 10, or 4.2 million, uninsured African-Americans should qualify for tax credits to buy health coverage in the new insurance exchanges or be newly eligible for Medicaid or the Children's Health Insurance Program, according to a report released Tuesday.

African Americans are uninsured in higher numbers than other groups, making up 16% of the 41.3 million uninsured U.S. citizens.

Most of them, however, live in states that have declined to expand Medicaid eligibility: 10% in Florida; 9% in Georgia; 9% in Texas and 6% in North Carolina.

New York, which did raise eligibility, is home to 5% of the uninsured African-Americans, according to the study.

—Virgil Dickson

Follow Virgil Dickson on Twitter: @MHvdickson