Republicans in the Iowa Senate passed a bill Tuesday that would require certain Iowans on Medicaid to prove they are working at least 80 hours a month to keep their coverage, if the federal government approves the state’s plan.
The work requirements would apply to the majority of people who receive health insurance through Iowa’s version of Medicaid expansion, the Iowa Health and Wellness Plan. It has about 180,000 members, ages 19-64, with incomes at or below 133% of the federal poverty level, or $20,000 per year for a one-person household.
The bill would exempt from work requirements people under 19 and over 65, those determined to be disabled by the U.S. Social Security Administration, people deemed medically frail, Iowans who are the caretaker for a dependent child under the age of 6, people with a high-risk pregnancy, Iowans who are getting unemployment benefits, people participating in substance use disorder treatment, and anyone else exempted by the director of the Iowa Department of Health and Human Services.
According to an analysis by the Legislative Services Agency, the work requirements could cause 32,000 Iowans to lose their health insurance next year, possibly saving the state $20.6 million in Medicaid costs.
The bill also says that if Iowa implements work requirements, and federal law is later changed to not allow them, the state “shall discontinue the Iowa Health and Wellness Plan, subject to federal approval.”
The work requirements could cause 32,000 Iowans to lose their health insurance next year, possibly saving the state $20.6 million in Medicaid costs.
Sen. Janet Petersen, D-Des Moines, said that would cut health insurance for more than 180,000 Iowans and damage the health care system.
“Let’s call this bill what it really is,” she said. “We’re seeing these bills all across the country popping up. This is a Medicaid repeal bill in sheep’s clothing.”
Sen. Mike Klimesh, R-Spillville, said ending Medicaid expansion would need federal approval. He said the work requirement is the most important part of the bill.
“By requiring work, we’re providing an important stepping stone to help Iowans develop the life skills, build responsibility and regain a sense of purpose,” he said.
Critics of the bill say most Iowans on Medicaid expansion are working, and the requirement to report their work hours to the state would cause thousands of people to lose their insurance. They also say the exceptions fall short, and they don’t include people who are caregivers for kids with disabilities or dependent adults.
Gov. Kim Reynolds has posted an image on social media that says “over 100,000 able-bodied adult Medicaid recipients are not working.” In fine print, the image says “not working” was calculated as Iowans making $551 or less per month.
— Gov. Kim Reynolds (@IAGovernor) February 27, 2025
The bill passed with a party-line 33-15 vote after a short debate in which only Petersen and Klimesh spoke.
The Senate has passed similar proposals in past years, and this year, House Republicans have advanced a nearly identical bill. Reynolds also said in her Condition of the State address that she would seek federal permission to establish Medicaid work requirements now that President Donald Trump is in office.
Questions raised about financial impact
During the first Trump administration, Arkansas implemented similar work requirements. In the first few months, about 18,000 people lost Medicaid coverage, and then a federal judge halted the program.
The Legislative Services Agency used the experience of Arkansas to estimate the financial impact for Iowa, noting that the LSA “has not received a response to multiple requests for information from the [Iowa] HHS.”
After debate ended, Sen. Molly Donahue, D-Cedar Rapids, said the Senate should not have moved forward without getting more information about the fiscal impact from HHS. She said other states spent money to implement work requirements.
“We are not going to save money on this,” Donahue said. “It is going to cost Iowa far more — not just the people who are losing their health care, if that happens — but those of us who are paying for our health care, because the hospitals and health care communities have to make up the money somewhere.”
A spokesperson for Iowa HHS did not respond to IPR’s questions Tuesday about the expected financial impact of the bill.
Bill raises asset limit for people with disabilities, creates IT fund
The bill would raise the asset limit for married couples for the employed people with disabilities program. Married couples would be allowed to have $24,000 of available resources, up from the current $13,000 limit.
Iowans with disabilities have been calling on lawmakers to remove asset and income limits so that they can advance in their careers and get married without fear of losing key health services covered by Medicaid. The LSA said it cannot estimate the financial impact because it didn’t receive requested information from HHS.
It would also create an information technology fund to help update HHS computer systems.
