SEATTLE — Under the Affordable Care Act (and the 2012 Supreme Court decision), states had the option to expand Medicaid or not do so. As of now, 24 states and the District of Columbia are moving forward with expansion; 26 states have either rejected expansion or have not yet decided.

But Arkansas and Iowa want to follow a different path entirely. Arkansas has a federal waiver, and Iowa is negotiating for one with the Centers for Medicare & Medicaid Services. Their goal is total transformation of coverage and services for low-income residents.

In Arkansas, the Health Care Independence Program is attracting a significant amount of national attention. Conceived after it was apparent that the state would not expand traditional Medicaid, the program was developed in record time, according to Suzanne Biermann, assistant director of the division of medical services in the state's department of human services at last week's State Health Policy Conference of the National Academy for State Health Policy. A few months of frenzied work resulted in federal approval in September. Basically, the program will cover all persons — in practical terms, mostly childless, low-income adults — with incomes below 133 percent of the federal poverty level. They will have the same choices as higher-income Arkansans shopping in the exchange — the same carriers and providers. People who have Medicare, are disabled, or for whom traditional Medicaid is more appropriate are excluded. In addition to the standard benefit package offered through the exchange, other services will be included:  nonemergency transportation, vision and dental services, and early periodic screening, diagnosis, and treatment (EPSDT) for 19- and 20-year-olds. At least two plans will be available throughout the state.

Arkansas officials expect 225,000 additional beneficiaries to enroll, with other groups being added over time.

Although Iowa has not received a federal waiver, Jennifer Vermeer, director of Iowa Medicaid, is hopeful that one will come through. The Iowa Health and Wellness Plan would be very similar to the Arkansas program — potential enrollees could shop in the exchange for the same plans available to others. The estimated enrollment is 150,000 people, the majority of whom would have incomes below poverty level.

But Iowa has added a twist: Although there would be no co-payments except for non-emergency use of hospital emergency departments, there would be monthly premiums for enrollees with incomes above 50 percent of poverty level. Although that would only average out to approximately $10 a month, this could be a sticking point with the CMS. The premium would be waived if enrollees complete a health self-assessment and get a physical exam. That bar will be raised in future years.

Patricia Boozang of Manatt, Phelps & Phillips noted that penalties for ED use for nonemergency conditions is "a sticky issue," because many of the newly enrolled have used EDs for care for years. Newly enfranchised people will have to be educated, and alternative paths of access will have to be available or created.

A last issue that was discussed briefly at one session was community benefit requirements for hospitals, especially if enrollment in coverage under ACA significantly reduces charity care costs (a big "if" indeed). Representatives of several states said that cooperative efforts involving all hospitals, the state government, and payers could streamline community health needs assessments and focus future efforts. Washington state Representative Laurie Jinkins said, "We have a lot of hope for what community benefit can be," but it will take a while.

These were only a few of the challenges that state health leaders identified. But, recognizing the reality of the situation, Kari Armijo, health care reform manager for New Mexico's human services department, predicted that some of the thornier issues will have to wait for "ACA 2.0"