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Iowa State treasurer attacks Branstad health plan

Published: Friday, April 12, 2013 11:34 a.m. CST

DES MOINES (AP) — State Treasurer Michael Fitzgerald waded Thursday into the partisan debate over whether to expand Medicaid in Iowa, attacking Gov. Terry Branstad’s alternative proposal as a “bad financial deal.”

The Democratic treasurer said that Branstad’s Healthy Iowa proposal would cost the state $163 million in the 2014-15 fiscal year, compared with a $4.7 million price tag for expanding Medicaid under the federal health care law. Fitzgerald said he based his numbers on information from the non-partisan Legislative Services Agency, as well as analysis by Senate Democrats.

“After thoroughly examining these we can see that the governor’s plan is a bad financial investment,” said Fitzgerald, speaking at a news conference. “We’re spending money and getting nothing for it.”

Branstad spokesman Jimmy Centers responded in a written statement that the governor doesn’t want to “engage in partisan bickering” and continues to oppose expanding an “antiquated program like Medicaid.”

The Medicaid program that provides health care for about 400,000 financially needy children, families and disabled people in Iowa is run jointly by the state and federal governments.

Senate Democrats have been pushing to expand Medicaid, as permitted under President Barack Obama’s health care overall. An expansion to include those at or below 138 percent of the poverty level would add an estimated 110,000 to 180,000 to the state’s Medicaid rolls. Under Obama’s plan, the federal government would pay the full cost for the new enrollees during the first three years of the expansion and then 10 percent of the cost would gradually be shifted to the state.

But Branstad opposes the plan, saying that long-term Medicaid costs are unsustainable. He is seeking a federal waiver to revamp an existing health program called IowaCare that uses state and federal dollars to provide basic health care to low-income adults.

The updated plan, called Healthy Iowa, would cover an estimated 89,000 residents with incomes below the poverty line. Participants would be responsible for contributions, though they could seek to avoid those due to hardships.

Both sides have been arguing over the cost of the proposals to the state and federal government.

The Senate Medicaid expansion plan would cost the state an estimated $1.43 million in the fiscal year that starts July 1 and cost $4.76 million the following year, according to analysis from the non-partisan Legislative Services Agency. Those figures include administrative costs for the program, as well as some additional non-Medicaid items such as expanding a dental program for low income adults. The agency also estimates that a Medicaid expansion in Iowa would cost the federal government $181.2 million in the coming fiscal year and $576.7 million the following year.

Branstad’s staff says his plan would cost the state roughly $162 million in the fiscal year that starts July 1 and $162 million in the following year. That cost will be covered by the state general fund, local property taxes and other sources. Health Care Policy adviser Michael Bousselot said no taxes would be raised and the cost to the state general fund would be $23 million each year. The federal cost would be about $225 million each year.

Democrats argue that the federal cost of the governor’s plan is actually more than double those numbers, when you include the estimated federal cost for the people just above the poverty line who will receive subsidies to buy private insurance.

Bousselot said that the state price tag for Medicaid will rise when ten percent of the burden is shifted to the states.

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