Medicaid expansion in Iowa
Iowa’s Medicaid program covers beneficiaries at higher incomes than many other states do, and Iowa expanded Medicaid to low-income adults through the Affordable Care Act (ACA). Initially, the state used a waiver to implement an Iowa-specific version of Medicaid expansion, but that was abandoned in 2015 in favor of straight Medicaid expansion as called for in the ACA.
However, the state also decided to switch the entire Medicaid program to managed care, intending to make the switch as of January 1, 2016. The federal government determined in December 2015 that Iowa needed additional time to make the transition to Medicaid managed care, and the new system, dubbed Iowa Health Link, took effect April 1, 2016.
Although the state claims that the transition has been smooth and will alleviate waste and fraud, patients and providers reported a much more rocky switch to the privatized Medicaid system.
There were initially three insurers offering Medicaid managed care through Iowa Health Link: Amerigroup, AmeriHealth Caritas, and UnitedHealthcare. But Iowa and AmeriHealth Caritas were unable to agree on the terms of a contract renewal in late 2017, and AmeriHealth Caritas withdrew from Iowa Health Link at the end of November, 2017, when their contract ended. And around the same time, Amerigroup informed the state that they did not have the capacity to accept new members.
So 200,000 AmeriHealth Caritas members were transitioned to UnitedHealthcare, which was the only Iowa Health Link insurer accepting new enrollees. There were another 10,000 AmeriHealth Caritas members who had selected AmeriGroup as their new Medicaid managed care plan before Amerigroup closed new enrollments, and the state transitioned those individuals temporarily to Medicaid fee for service (ie, not managed care).
The state continued to work with Amerigroup to solve the capacity issue, and by early 2018, Amerigroup had opened up their program to new enrollees once again. The people who had selected Amerigroup in the fall of 2017 and had instead been enrolled in fee for service Medicaid were covered under Amerigroup as of March 1, 2018. And new Iowa Health Link members whose coverage starts May 1, 2018 or later will be able to select from UnitedHealthcare or Amerigroup.
Both insurers have contracts that continue through June 2018, and the state is working on the details of the renewal.
Who qualifies for Iowa Medicaid?
The Medicaid eligibility guidelines in Iowa are as follows.
- Children up to age 1 are covered with family income up to 375 percent of the federal poverty level (FPL)
- Children ages 1 to 18 are covered with family income up to 167 percent of FPL
- Children with family income too high to qualify for Medicaid are eligible for the Children’s Health Insurance Program (CHIP); Iowa’s program is named hawk-i, and it’s available to kids with family income up to 302 percent of FPL
- Pregnant women are covered with family income up to 375 percent of FPL
- Parents and other adults are covered with incomes up to 138 percent of FPL
Visit Medicaid.gov to see a chart that shows Medicaid eligibility levels as annual income limits.
Other people, such as low-income elderly, blind or disabled individuals, may qualify for Medicaid as well. See who qualifies or call 1-800-972-2017 (Relay Iowa TTY: 1-800-735-2942) or email email@example.com for more information.
How to enroll in Iowa Medicaid
To apply for Medicaid:
- Create an account and apply online via the Iowa Department of Human Services (DHS) portal. You can also apply through HealthCare.gov
- Print an application in English or Spanish. Mail your completed application to Imaging Center 4; PO Box 2027; Cedar Rapids, Iowa 52406.
- Get help with your application by calling 1-855-889-7985.
Medicaid expansion – with a waiver
The federal government laid out very specific parameters for Medicaid expansion under the ACA. But states have the option of seeking a waiver from CMS in order to implement unique approaches to Medicaid expansion, and still receive federal funding to do so.
In December 2013, Iowa received a waiver for its alternative to the ACA’s Medicaid expansion. Under a program called the Iowa Health and Wellness Plan (IHAWP), very low-income residents (household income at or below the poverty level) would be enrolled in a state-run health plan (Iowa Wellness Plan, or IWP) and, in some cases, be required to pay modest premiums. Other residents with slightly higher incomes (101 percent to 138 percent of the federal poverty level) would purchase insurance through the marketplace via a program called the Iowa Marketplace Choice Plan (MPC), with premiums paid by the federal government.
The federal government approved two waiver amendments in December 2014. One allowed Iowa to continue not providing non-emergency transportation. The other allowed Iowa to continue charging a monthly premium for beneficiaries with income under 138 percent FPL. Beneficiaries could reduce or eliminate the premium if they completed a wellness exam and health risk assessment.
The Iowa Health and Wellness Plan launched Jan. 1, 2014, and about 120,000 people were enrolled as of late December 2014 (50% more than the 81,000 people the state had projected). But problems began to crop up early on.
Only Coventry and CoOpportunity Health (an ACA-created CO-OP) participated in the privatized Medicaid program (MPC) in Iowa, and CoOpportunity was liquidated by state regulators at the beginning of 2015. Around the same time, Coventry told state regulators that it was experiencing financial hardships as a result of covering MPC members, and was considering dropping out of the program. By June 2015, just 6,937 IHAWP members were enrolled in Coventry plans; the remaining 127,016 were covered by IWP, including more than 33,500 people who would have otherwise been eligible for a private plan under MPC – there were simply no private carriers available to provide coverage.
Medicaid expansion – without a waiver, but with managed care
In July 2015, Iowa officials announced that they were abandoning their Medicaid demonstration waiver, and would instead implement Medicaid expansion as called for in the ACA, but with a Medicaid Modernization manged care waiver instead, switching Iowa Medicaid enrollees to a Medicaid managed care system (39 states and DC already had Medicaid managed care programs).
560,000 Medicaid beneficiaries were scheduled to transition to the Medicaid managed care system (Iowa Health Link) as of January 1, 2016. The Medicaid enrollees were supposed to select a managed care program by mid-December, but many enrollees were having trouble determining which managed care programs included their doctors and hospitals. As a result, the federal government delayed Iowa’s switch to managed care until March 1, 2016. The federal government ultimately gave the go-ahead for the switch on February 23, but added an extra month to allow enrollees, MCO carriers, and providers time to make the change. The Medicaid managed care system in Iowa took effect April 1, 2016.
In August 2015, Iowa officials announced that Medicaid managed care contracts would be awarded to four private carriers in 2016: AmeriHealth Caritas, Anthem (Amerigroup), UnitedHealthcare, and WellCare. Seven other carriers bid on the contracts but were not selected. But in December, WellCare lost their contract “due to issues in the bidding process,” and the number of participating managed care providers dropped to three. People who had already enrolled in WellCare’s program were transitioned to one of the other three managed care programs.
In January 2016, questions arose about the business practices of AmeriHealth and UnitedHealthcare in Medicaid managed care programs in other states, including neighboring Kansas. The carriers had allegedly been denying claims for Medicaid patients in an effort to curtail costs, and have had to pay tens of thousands of dollars in settlements with the states involved. However, the carriers’ contracts for Iowa’s Medicaid managed care program remained on-track, and AmeriHealth Caritas Iowa, Amerigroup, and UnitedHealthcare were all participating in the MCO program when it launched.
Eligibility for coverage under Iowa’s Medicaid expansion is unchanged; coverage is still available to residents with household income up to 138 percent of the poverty level. But enrollees with incomes between 101 percent and 138 percent of the poverty level are no longer enrolled in private exchange plans. Instead, they are enrolled in a private Medicaid managed care program, just like the rest of the Medicaid population in Iowa.
As described above, Iowa Health Link has experienced some upheaval in late 2017/early 2018. AmeriHealth Caritas withdrew from the program on November 30, 2017, after being unable to reach an agreement with the state for a contract renewal. And Amerigroup notified the state that they would have to temporarily suspend new enrollments, due to lack of capacity. That left UnitedHealthcare as the only Iowa Health Link insurer accepting new enrollees, and 200,000 former AmeriHealth Caritas members were transitioned to UnitedHealthcare. By March 2018, however, Amerigroup had added the capacity they needed to enroll new members, and enrollees whose coverage begins May 1, 2018 or later can choose from UnitedHealthcare or Amerigroup as their Iowa Health Link insurer.
Senate Democrats tried to block managed care transition
Democrats in the Iowa Senate tried to halt the switch to managed care, and passed Senate File 2125 in February 2016, which would have terminated the managed care contracts and instructed the existing Medicaid fee-for-service program to focus on improving patient outcomes and access to care, and increasing efficiency (the bill did not advance further, however).
Democrats in the Senate said in February that they still didn’t consider the switch to managed care to be a sure thing, and noted that federal officials were still concerned as of early February that the transition to Medicaid managed care might not be on track to go live as of March 1.
Ultimately, the transition was made on April 1, but Iowa Democrats have continued to push for a return to traditional Medicaid, rather than the privatized system. And there are ongoing concerns that the new system is preventing people from accessing healthcare, and failing to pay providers.
More information about the Iowa Medicaid program
Iowa implemented its Medicaid program in July 1967. Iowa Medicaid Enterprise (IME), a division of the Iowa Department of Human Services (DHS), is the name of the entity that administers the state’s Medicaid program.
Total enrollment in Iowa’s Medicaid program was 653,051 as of November 2017. Enrollment has increased about 32 percent since the first ACA open enrollment period began in the fall of 2013.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.