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June 2008

Iowa Enacts Health Care Reform Legislation

On May 13, Iowa Governor Chet Culver signed into law a significant health reform bill, House File 2539. This reform bill includes a variety of provisions:

  • Children’s Coverage—The bill aims to expand health coverage for all children. The state will provide health care coverage to all children in families with incomes up to 300 percent of the federal poverty level (FPL) beginning in Fiscal Year (FY) 2010. A premium will be required for families earning above 200 percent FPL. This expansion could extend coverage to approximately 9,000 uninsured Iowa children. Over $40 million in General Fund appropriations will be given to the Department of Human Services from 2009 to 2011 to implement the expansion programs. The state intends to implement the program in July 1, 2009 for FY 2010. A significant part of the legislation is the requirement that Iowans indicate on their income tax forms if their dependent child has health care coverage.
  • Creates the Iowa Choice Health Care Coverage Advisory Council— The council is charged assisting the Iowa Comprehensive Health Insurance Association (Iowa’s high risk pool) with developing a comprehensive plan to provide health care coverage to all state residents within five years.
  • Ensures Continuous Eligibility—The Medicaid program will now provide continuous eligibility for twelve months for children who could otherwise become ineligible due to changes in family income.
  • Requires an Annual Report—The Department of Revenue and the Department of Human Services (DHS) are required to submit an annual report to the Governor and General Assembly providing: 1) the number of families claiming state income tax exemptions for dependent children; 2) the number of families claiming state income tax exemptions for children that also indicate the presence or absence of health care coverage for those children; and 3) the effect of the tax form reporting requirements on the number of children that are uninsured.

  • Maximizes Enrollment—Requires the DHS to develop a plan to maximize enrollment and retention of eligible children in all public coverage programs.

  • Creates a Bureau of Health Insurance Oversight—Located within the Insurance Division of the Department of Commerce, the Bureau of Health Insurance Oversight will be charged with ensuring uniformity and transparency of health insurance operations.

  • Develops Long-Term Living Planning and End-of-Life Care Education Campaign—Requires the Department of Elder Affairs to implement a public education campaign to inform state residents about long-term care options and end-of-life care.

  • Creates a Medical Home System—Requires the Department of Public Health to create and implement a Medical Home System focused on reducing health disparities, improving quality, reducing costs, and promoting sustainability.

  • Implements the Family Opportunity Act—Adds a Medicaid buy-in option for individuals under the age of 19 with disabilities whose family income is at or below 300 percent FPL to be implemented January 1, 2009. A premium will be changed for those between 100 and 300 percent FPL.

  • Establishes Healthy Communities Initiatives—Creates a grant program to promote healthy lifestyles as well as a Governor’s Council on Physical Fitness to develop a strategy for implementation of the statewide comprehensive plan to increase physical activity, improve physical fitness, improve nutrition, and promote healthy behaviors.

  • Medicaid Quality Improvement—Establishes a Medicaid Quality Improvement Council to evaluate clinical outcomes and consumer and provider satisfaction.
  • Transparency—Creates a quality and transparency workgroup to develop recommendations regarding cost and quality measures to be used to provide information to consumers.
  • Provides Reimbursement Accounts—Requires the Commissioner of Insurance to assist employers with 25 or fewer employees with implementing and administering Section 125 plans, including Medical Expense Reimbursement Accounts and Dependent Care Accounts.

  • Excludes Pre-Existing Conditions—Prohibits the use of pre-existing conditions when moving between plans, including to and from individual plans.

  • Extends Dependent Coverage—Allows dependents under the age of 25 or while still full-time students to continue to stay on their parents’ or guardians’ health plans until they turn 25, get married, or leave the state.
  • Creates the Iowa Electronic Health Information Commission—The Commission is charged with the development of a statewide health information technology plan by January 1, 2009. The system is designed to expand the use of electronic health records and improve health care quality with decreasing costs.
  • Health Care Coverage to Caregivers—Creates a two-year pilot program that offers premium assistance for health care coverage to direct care workers. This pilot program will help determine if this type of policy should be offered across the state.