Republican Indiana Gov. Mike Pence announced on Tuesday that an agreement had been reached on the state’s Medicaid expansion proposal submitted in July. As many as 350,000 people could gain coverage under the federal health law after a key concession from the Obama administration was made. The deal could lead to half a dozen more states advancing similar Medicaid expansion proposals in Republican-led states including Florida, North Carolina and Wyoming.

Pence’s proposal, known as the Healthy Indiana Plan 2.0, provides a two-tiered coverage system: one for residents living above 100% of the federal poverty line, and one below. Those living under the poverty level will have access to basic health coverage, as well as the option to pay a monthly contribution for access to dental or vision benefits ranging from $3 to $15, depending on income proximity to the poverty line. Those living above the poverty level will be mandated to pay a monthly contribution of about $25.

Indiana and Washington officials had been deadlocked for months over an issue that could shape the future of Medicaid, the 50-year-old federal-state health program that covers more than 60 million low-income Americans. Pence had stated that he would not allow the program to expand unless he was allowed to charge some participants contributions toward the cost of their coverage and lock them out of the program for six months if they didn’t comply. Approval for Indiana’s waiver had been uncertain as the two sides struggled to reach a compromise on the tiered coverage approach. It is uncertain what if any compromises were made in the approval process. Neither the Pence administration nor HHS has released the details of what was and was not approved in the waiver.

Contributions toward coverage have become an increasingly important focus of conservative lawmakers seeking to expand health coverage while reshaping the Medicaid program along new ideological lines. Pence had said a number of other states were closely monitoring his negotiations, and that they could follow his lead if the Obama administration relented. Currently, 27 other states have agreed to use federal dollars to expand Medicaid, and a 28th, Tennessee,  is formally considering a deal.

Seema Verma, a top adviser to the governor, said the program will begin taking new enrollments Tuesday, for coverage that begins February 1st. Officials and advocacy groups looking at Medicaid expansion in Alabama, Florida, Idaho, North Carolina and Wyoming  noted they were watching the outcome of the Indiana deliberations as a potential factor that could change their state’s decision.