Audit: IowaCare Participation has Spiked Among Needy Iowans

By Rod Boshart, Reporter

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By Liz Blood

DES MOINES, Iowa - Participation in a state program that provides limited health coverage to low-income Iowans has jumped dramatically since the Legislature and former Gov. Tom Vilsack launched IowaCare in fiscal 2006, according to a state audit issued Friday.

State Auditor David Vaudt reported that IowaCare enrollment was 60,703 as of last June 30 -- an increase of 42,661, or 237 percent over the enrollment of 18,042 as of June 30, 2006. Initial projected expected about 14,000 Iowans would enroll in the program.

“This significant increase was primarily due to the expansion of the IowaCare provider network and the addition of new services, such as emergency services available through non-participating providers, radiology and laboratory services and care coordination, during fiscal years 2010 through 2012,” according to the audit report “During fiscal year 2012, a total of 86,802 participants received services under IowaCare.”

IowaCare is a state and federally funded plan that provides limited health coverage to low-income adults from ages 19 through 64 who are not otherwise eligible for Medicaid. The purpose of IowaCare is to provide some health care coverage to people who would otherwise have no coverage.

Eligibility for IowaCare is primarily based on household income as a percentage of the federal poverty level established annually by the U.S. Department of Health and Human Services. Effective October 2010, the minimum federal poverty level percentage used to determine the assessment of premiums increased from 110 percent to 150 percent.

To enroll in IowaCare, individuals must submit an application to DHS for approval. Application information is self-reported and is not consistently verified by the state Department of Human Services.

Vaudt reported Friday that total revenues recorded in the IowaCare Account Fund increased from about $97 million in fiscal 2006 to about $141.8 million in fiscal 2012 -- an increase of nearly $44.8 million primarily due to increased federal funding received as a result of the increased number of IowaCare participants and the expansion of the provider network and services.

The IowaCare program has become a focal point in the debate over whether Iowa should expand Medicaid coverage under federal health-care reforms to another 150,000 state residents or seek an extension of a federal waiver for IowaCare due to expire in September.

Gov. Terry Branstad favors the waiver approach in hopes of better managing state costs rather than participating in a federal Medicaid expansion that could prove costly in future years once federal funding of the expanded coverage is scaled back. The governor has taken a wait-and-see approach, noting that funding decisions that play out in Washington, D.C., in the coming months will create a clearer picture of the federal government’s ability to make good on its financial commitments.

Starting Jan. 1, 2014, the new federal law expands Medicaid eligibility to people making up to 138 percent of the federal poverty line, or about $15,400 for an individual. Under the law, the federal government will pay the full cost of the expansion the first three years, from 2014-2016. Thereafter, the federal share gradually phases down to 90 percent, still way more than the government pays for the rest of Medicaid.

Proponents of expanding Medicaid coverage for Iowans say the IowaCare program does not provide the access and range of services available under Medicaid and likely will cost the state more to expand IowaCare if a waiver is granted that it would to do the Medicaid expansion.

In his report, Vaudt recommended the Legislature and the Iowa Medicaid Enterprise, a DHS division that administers the IowaCare program, “give careful consideration to the state’s ability to maintain IowaCare if unrestricted participant growth continues.”

In addition, the state auditor recommended the Legislature and DHS officials review the current premium structure and the impact of hardship exemptions on IowaCare revenue and determine if the ability for participants to claim unlimited hardship exemptions conflicts with the intent of IowaCare.

Vaudt also recommended DHS officials implement procedures to ensure eligibility determinations and premium assessments are supported by sufficient documentation.
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