On December 10, 2013, the Centers for Medicare and Medicaid Services (CMS) approved Iowa’s waivers to implement the Affordable Care Act (ACA) Medicaid expansion. The state plans to provide coverage for the new adult group through two different mechanisms.
For individuals in the new adult group with incomes below 100% of the federal poverty level (FPL), the state will provide coverage directly through what it calls the Iowa Wellness Plan. For individuals with incomes between 100% and 133% of the FPL, Iowa will use premium assistance to purchase qualified health plans (QHPs) in the Health Insurance Marketplace (Marketplace). Referred to as the “Marketplace Choice” plan, Iowa’s premium assistance waiver will enable individuals with incomes between 100% and 133% of the FPL to enroll in the same QHPs as individuals receiving premium tax credits. Iowa also has received approval to use premiums, subject to several conditions, as well as not to offer non-emergency transportation to expansion adults. The key features of the Marketplace Choice plan include the following:
Eligibility. Iowa adults eligible to enroll in QHPs through Marketplace Choice include newly- eligible, childless adults under age 65 and parents with incomes from 100%-133% of the FPL. Those adults who are determined to be medically frail are exempted from Marketplace Choice enrollment and will be covered through Iowa’s traditional fee-for-service Medicaid program, unless they elect to receive coverage through Marketplace Choice.
Plans. Marketplace Choice-eligible individuals will be able to select from any Silver Level QHP offered in their service area.
Benefits. Under the ACA, covered benefits for newly-eligible adults in Medicaid (the Alternative Benefit Plan), such as benefits for QHP enrollees, are based on ACA-defined Essential Health Benefits. This alignment in benefits facilitates the integration of public and private coverage in Iowa’s Marketplace Choice. Under the waiver, the only significant benefit that Iowa Medicaid must provide outside of the QHP benefit is limited to Early Periodic Screening Diagnosis and Treatment benefits for 19- and 20-year olds. CMS granted Iowa a one-year waiver of the requirement to provide Marketplace Choice enrollees with non-emergency medical transportation.1
Premiums. Beginning in year 2 of the demonstration, Marketplace Choice enrollees will be required to pay a premium that is capped at 2% of income—the same amount that would be required if they purchased coverage through the Marketplace with premium tax credits. Marketplace Choice enrollees can reduce or eliminate their premiums by engaging in specific healthy behaviors, which Iowa will identify at a later date. The state is also required to grant hardship waivers to individuals who self-attest to a financial hardship.
Cost Sharing. Marketplace Choice enrollees will have no cost-sharing obligations, with the exception of co-payments for non-emergency use of the emergency room.
Appeals. Marketplace Choice enrollees will retain their Medicaid appeal rights for disputes regarding covered benefits.
Similarities and Differences Compared to Arkansas
The Marketplace Choice plan is similar to the Arkansas Health Care Independence Program approved by CMS on September 27, 2013. Under both waivers, the state Medicaid programs will use premium assistance to purchase QHPs for individuals in the new adult group. There are, however, some important differences between the two programs. Arkansas’s premium assistance program includes all individuals in the new adult group (except for the medically frail), while Iowa’s program is limited to individuals with incomes above 100% of the FPL. Also, individuals covered through Arkansas’s program have no premium obligation. They also are required, however, to pay cost sharing that aligns with the cost-sharing for individuals with similar incomes who purchase QHP coverage with premium tax credits.
Cost sharing in Arkansas’s premium assistance program is also consistent with Medicaid cost-sharing rules. By contrast, individuals enrolled in Iowa’s program have limited cost-sharing requirements, but they must pay premiums, unless they complete certain healthy behaviors or attest that they are unable to pay. Finally, Arkansas will continue to provide non-emergency transportation for individuals in the new adult group, while Iowa has a one-year waiver of this requirement.
Arkansas and Iowa are bellwethers for other states seeking tailored ACA Medicaid expansions. Governor Corbett of Pennsylvania announced last week his intent to submit a waiver implementing the expansion through a premium assistance model similar to the Arkansas and Iowa models. Notably, the Pennsylvania proposal requests 23 waivers of Medicaid requirements (far more than either the Arkansas or Iowa demonstrations), including a waiver to permit premiums for individuals with incomes above 100% of the FPL that would exceed the 2% of income these individuals would otherwise pay in the Marketplace. Pennsylvania plans to submit its waiver following a public notice and comment period that ends on January 13, 2014.
Iowa's Governor Terry Branstad announced on December 12 that the state and CMS have reached a general agreement on the terms of waivers but are still discussing the final terms and conditions for the program. Coverage under the Marketplace Choice plan is slated to begin on January 1, 2014, giving Iowa little time to finalize the waiver conditions with CMS and prepare for implementation.
Manatt Health will continue to monitor developments around ACA Medicaid expansions and keep you informed.
1 CMS also granted a one-year waiver of the requirement to provide non-emergency medical transportation to individuals in the new adult group with incomes below 100% of the FPL through the separate waiver effectuating the Iowa Wellness Plan. The waiver effectuating the Iowa Wellness Plan includes the waiver of non-emergency medical transportation, as well as a waiver for Iowa to create an incentive program to promote healthy behaviors. Individuals in the Iowa Wellness Plan will not be enrolled in qualified health plans, and they will not be subject to premiums.