Statehouse and Politics
5:10 pm
Thu March 14, 2013

Senate Democrats Unveil Plan to Expand Medicaid with Opt-Out Option

Flanked by Senator Jack Hatch (left D-Des Moines) Senate Majority leader Mike Gronstal (right D-Council Bluffs) talks with reporters about the Democrats' Medicaid expansion plan on March 14, 2013.
Credit Clay Masters / IPR
Democrats in the Iowa Senate say their new proposal would let the state opt out of the Medicaid expansion if the feds can't live up to their promise to fund the program.

Democrats in the Iowa senate say they’re extending an olive branch to Republican Governor Terry Branstad regarding their proposal to expand Medicaid in the state. The governor is opposed to expanding the joint federal state healthcare program for the poor mainly because he doesn’t believe the feds can continue to pay for it. Democrats are offering an opt-out provision in case federal funding levels would change.

The Democrats are still very much pushing for an expansion of Medicaid in Iowa. But President of the Iowa Senate, Pam Jochum, a Democrat from Dubuque, says they’ll reevaluate the expansion if the federal government does NOT keep its promise.

“In other words if it would renege on its commitment of paying 100 percent of the cost for the next three years,” Jochum said. 

After the third year the feds start footing less of the bill. There are about 400,000 low-income Iowans enrolled in Medicaid. The Department of Health and Human Services estimates an expanded Medicaid program would add as many as another 180,000 Iowans. 

“The worst thing we can do is extend coverage to these vulnerable Iowans and then have the federal government pull the rug out from under them," said Branstad spokesman Tim Albrecht. "President Obama in 2009 noted that we shouldn’t be putting more people into a broken system… like Medicaid.”

Governor Branstad’s plan, called Healthy Iowa, would cover 89,000 uninsured Iowans who earn below 100 percent of the poverty level. His plan can only happen if a waiver is approved by the feds and legislative action is taken here in Iowa. Democrats call what the governor has rolled out… a bad plan that covers less Iowans and costs more.  Republicans, who have the majority in the Iowa House, like the governor’s plan. House Speaker Kraig Paulsen a Republican from Hiawatha, says he’s not so sure federal rules will let states back out.

"Once we have moved forward within Medicaid, the federal government has almost always required us to continue doing that or we put the entire Medicaid program at risk," Paulsen said.

But House Republicans say they’ll look at the language Democrats in the Senate have laid out. So if this new Democratic plan passes that expands Medicaid in Iowa with this new opt-out provision… what happens if the federal funds don’t stick? Senate Majority Leader Mike Gronstal, a Democrat from Council Bluffs, says any Plan B would need to come AFTER they’ve talked with the governor. Gronstal told reporters in a Thursday press conference Governor Branstad’s plan doesn’t make sense.

“So you’ve got 163 million dollars here added to Iowans bills, you’ve got 100s of millions added to Iowans bills indirectly thru health insurance premium increases," Gronstal said. "And you have under his plan another 75,000 Iowans that get left out of care.”

The Democrat’s plan comes just as Governor Branstad leaves for vacation and won’t return until late next week. The governor is visiting Arizona… Where Republican Governor Jan Brewer has signed on to an expansion of Medicaid with a similar opt out option if the feds don’t keep their promise. Senate Majority Leader Gronstal says the trip might do the governor some good.

“Maybe he can read some of the legislation going on in Arizona," Gronstal said. "Maybe this’ll be helpful."