December 10, 2013
Iowa Governor Terry Branstad (AP Photo by Justin Hayworth)
Iowa Governor Terry Branstad (AP Photo by Justin Hayworth)

Opponents of the Affordable Care Act tend to suggest expanded coverage resulting from the law’s Medicaid expansion somehow doesn’t really count as success. But the law’s goal is to expand coverage, and the Medicaid expansion is one of the tools it utilizes to accomplish that.

And here’s another way the Medicaid expansion could succeed — continuing to grow the built-in constituencies that will benefit from the Affordable Care Act.

I’m told that the Department of Health and Human Services has just notified Iowa that it is prepared to grant the state a waiver to pursue much of what it has asked for in response to its request for HHS approval to expand Medicaid-funded coverage to low income Iowans on the state’s own terms. “Iowa has proposed a lot of innovative ideas around the Medicaid expansion, and we’re really pleased to approve the waiver today,” an HHS official tells me.

This could make it more likely Iowa takes federal money to expand coverage — which could impact as many as 150,000 people — and that, in turn, could also signal that other states similarly looking to expand Medicaid in their own way could have an easier time doing that. This is a way out for Republican governors who are hostile to the law, but under internal pressure to accommodate the Medicaid expansion, since it means bucket-loads of federal money to cover their own constituents.

At stake is the possibility that hundreds of thousands of Americans could still ultimately get expanded coverage in states like Iowa, Pennsylvania, Tennessee, and others that have not opted in to the traditional Medicaid expansion, but have not flatly ruled out taking federal money – which could have broad political implications for the law.

In Iowa, Governor Terry Branstad had declined to opt in to the Medicaid expansion, and he has been asking HHS for a waiver that would allow Iowa to pursue its own reform that would accomplish pretty much the same thing. Iowa’s solution would use federal money to expand coverage to poor Iowans by financing their premiums through the private market. Iowa also wants to charge those people premiums (at a discount if they agree to a health assessment) with the goal of putting the state’s own conservative stamp on the expansion by requiring Iowans to take charge of their health.

HHS just informed Iowa, I’m told, that they are mostly willing to go along with the state’s request, with a caveat. HHS is granting Iowa a waiver to pursue its own program, but without premiums charged on those up to 100 percent of the poverty line. Those between 100-138 percent of the poverty line would pay the premium.

How this plays out could signal how talks will go with other states that are trying to do similar things. Arkansas has already announced its own HHS-approved version of the Medicaid expansion. A few days ago, Pennsylvania announced its own bid to get a waiver from HHS, after its GOP governor came under criticism, and talks are underway. Tennessee is also in talks with HHS but the state’s GOP governor, who is under heavy pressure to opt in to the Medicaid expansion, has not provided enough details of his approach yet.

Flexibility on the part of HHS — as we seem to be seeing with Iowa — would presumably make it harder for states not to ultimately accept federal money. It makes it harder for GOP governors to argue that the Big Bad Federal Government is trying to impose solutions on them, and hopefully, this will mean other states will find a way to opt in. This would only add to the law’s expansion of coverage, potentially to the tune of hundreds of thousands more people over time.

Greg Sargent writes The Plum Line blog, a reported opinion blog with a liberal slant -- what you might call “opinionated reporting” from the left.