Newsletter: Rozenboom Report-Week 10 (3/22/2013)

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One of the most important decisions the legislature and the Governor must make this year is how to deal with providing health care to uninsured Iowans with the new mandates of the federal government under the Affordable Health Care Act. Iowa legislators continue to receive many form e-mails encouraging the legislature to support Medicaid expansion. Most e-mails say that the federal government is picking up the tab for the expansion, and itís too good a deal to pass up.

Many other Iowans have deep concerns about expanding this entitlement program because of its tremendous cost, because of questions about whether the federal government will keep their funding promises, and because there is no incentive for Medicaid recipients to manage their own health.

Governor Branstad is working on an alternative to Medicaid expansion that merits a close look. The Healthy Iowa Plan would cover all the approximately 89,000 uninsured Iowans earning below 100% of the Federal Poverty Level (FPL). Individuals above 100% FPL are eligible for tax credits to purchase affordable private health insurance through the Health Insurance Exchange. Purchasing private insurance on the exchange gives people the opportunity to choose what is best for them and for their family.

The Healthy Iowa Plan will utilize Accountable Care Organizations (ACOs) being established in Medicaid and the private sector. Plan participants will have a medical home that will work to coordinate their care. That coordination leads to healthier outcomes than the patchwork Medicaid system. It provides a commercial-like benefits package that includes in and outpatient services, physician services, prescription drugs, home health, durable medical equipment, therapies and some transportation. The new plan rewards health care providers for helping make Iowans healthier. The Healthy Iowa Plan uses a value-based reimbursement model to incentivize ACOs and the health care delivery system. This means providers no longer have a fee-for-service model; rather they focus on quality outcomes for Iowans. This payment methodology is modeled after those seen in the private sector.

The Healthy Iowa Plan, unlike Medicaid, is designed to implement personal responsibility mechanisms to encourage members to be cost conscious consumers of health care. The Healthy Iowa Plan provides individual accounts designed to help pay for copays and deductible expenses. It requires individuals to make monthly contributions to their account and provides State matching contributions to help pay for out of pocket expenses. It allows individuals to earn bonus contributions to their account for completing risk assessments and preventative services. And it potentially eliminates required contributions for the very low income (below 50% of FPL) through participation in the Healthy Behaviors Program

I believe we need to continue to work with the Governor to fine-tune this plan, and keep Iowans independent of another federal entitlement program such as expanded Medicaid. There is no hurry to decide. Itís more important to make the right decision than to make a quick decision.

REC Meeting Key Component of Budget Process

The Revenue Estimating Conference (REC) meets at least three times a year and is a key component of the budgetary process in Iowa. The REC is tasked with agreeing upon budget estimates for the current fiscal year for the State of Iowa. Recent REC reports have indicated that revenue in Iowa is up and many involved in the budget process expect this weekís REC report will illustrate the same.

The three-member Conference was established by Iowa Code and is comprised of the Governor or the Governorís designee, the Director of the Legislative Services Agency or their designee, and a third member agreed upon by the other two members. The Code directs the Governor to use the December REC estimate in establishing his budget. If the REC March estimate is less than the December estimate, the Governor and Legislature are required to use the lower estimate in budget creation. However, if the March estimate is higher or the same as the December estimate, the law requires the Governor and General Assembly to use the original December estimate.

The anticipated positive revenue estimate will be welcome news for those who love big government. The Senate Democratís budget currently spends roughly $500 million more than the House Republicans and over $200 million above what the state takes in. But reckless fiscal behavior pushes the state down the road of fiscal uncertainty through out-of-control spending and lack of budgetary restraint. We must work to meet the needs of Iowans while adhering to sound budgetary principles of spending within oneís means so future generations are not burdened with our mistakes.

Please feel free to contact me at 641-295-6551.

Senator Ken Rozenboom

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