The Obama administration Tuesday granted Iowa much of what it requested to move forward with a Medicaid expansion through the use of private insurance plans but refused to allow the state to charge premiums for those who earn less than the federal poverty level.

If the state accepts the terms of the agreement, it would become the second to be allowed to use federal dollars to finance the purchase of private health insurance for the newly Medicaid eligible.  Arkansas was earlier granted that permission by the Centers for Medicare & Medicaid Services (CMS).