Des Moines —
Gov. Terry E. Branstad today submitted a letter to Health and Human Services Secretary Kathleen Sebelius to inform the Federal government that Iowa will avoid a costly state-based model and will instead pursue a state-federal partnership to retain autonomy over Iowa’s healthcare system and minimize costs. The State will pursue a practical path that prevents Federal intrusion into the State’s health insurance and Medicaid operations. The governor’s decision comes in response to the December 14 deadline Sec. Sebelius gave states to make a decision. If Iowa did not submit its letter today, the State would have defaulted into a Federal exchange.
Gov. Branstad first stated his guiding principles on health care reform, saying, “Iowans deserve health care reform that improves care, lowers cost and most of all makes people healthier.”
In the letter, Branstad outlined the reasons for his decision stating, “…I continue to have concerns that an intrusive Federal exchange would raise costs on individuals and businesses, making it harder for them to create jobs and raise family incomes in Iowa. The State of Iowa intends to minimize the Federal government’s intrusion into the regulation of insurance. We will continue to regulate insurance plans in Iowa and retain control over our Medicaid and Children’s Health Insurance Plan eligibility.
“If our State loses control of the costs of these programs, other funding priorities like education, public safety and workforce development may be threatened. Maintaining responsibility and operational control will also enable our efforts to modernize health care and to change our payment methods to reward quality and improve Iowans’ health instead of procedure volume.”
Branstad could choose one of three options: A state-built, state-funded exchange; a state-Federal partnership model; or a full Federal takeover of Iowa's health insurance system.
· A full State-built, State-financed exchange would cost $16 million annually. Additionally, the Federal government has yet to put forth clear parameters on what would be expected of a state-built, state-financed exchange. For example, Utah already has a state exchange, but it is doubtful regulators will approve it under the Affordable Care Act. Even Massachusetts, whose system was modeled when crafting the Affordable Care Act, is unlikely to meet the requirements put forth by the Federal government without changes to its design. Gov. Branstad believes it would be irresponsible to put the state in this kind of financial and regulatory limbo.