Iowa extends transitional health plans through 2021

April 04-- Apr. 4--The state insurance commission has extended certain health insurance policies in Iowa that are not compliant with the federal Affordable Care Act.

The Iowa Insurance Division announced Thursday that transitional policies -- otherwise known as grandmothered health plans -- will be extended in Iowa through 2021.

The division issued guidance to insurers and their consumers after the federal Centers for Medicare and Medicaid Services, or CMS, approved the extension of these plans last week.

Transitional plans are health policies purchased after the ACA was passed into law in 2010, but before it was implemented in 2014.

"I appreciate CMS taking the action to extend transitional policies through 2021," said Iowa Insurance Commissioner Doug Ommen in a statement.

"Without this action, over 82,000 Iowans would be forced off their health care plans and forced to choose between purchasing a policy that would be in excess of 25 (to) 200 percent higher than their current premiums or perhaps going uninsured," Ommen said.

He said that those who "have to bear the full brunt of those premiums would simply choose to not purchase ACA-compliant insurance through the marketplace."

Approximately 11.4 million people enrolled in a health plan through the federal ACA exchanges to cover the cost of their health care in 2019, which is a decline of about 300,000 people from 2018, according to CMS officials.

In Iowa, 49,210 individuals selected a plan through the ACA exchange for 2019 -- a decrease of about 4,000 consumers who signed up in 2018.

Officials noted the drop in enrollment nationwide and in Iowa is in part due to the extension of non-compliant plans.

Iowa previously had extended transitional plans through 2019 -- but as with ACA compliant plans, the number of individuals holding those plans have been on the decline.

By the end of 2018, 31,868 Iowans received health care coverage through transitional plans. In 2014, 75,580 Iowans had transitional plans.

"Transitional policies are not a long-term solution, but ultimately only Congress can fix the structural flaws in the ACA," Ommen said. "Until Congress acts, these transitional policies need to be extended."

Ommen has been a critic of the ACA for "structural flaws" within the federal program, including its income-only-based subsidy design and the lack of a predictable reinsurance mechanism, among others.

"Congress needs to fix this federal problem," Ommen said. "Whether the 'fix' is amending the ACA, or replacing the ACA with a law by a different name with some of the same coverage guarantees, it is clear that something must be done."

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