Iowa Insurance Commissioner proposes short-term fix for collapsing ACA market

June 12--Iowa's insurance commissioner wants the federal government to approve a plan he thinks will stabilize the state's individual insurance market and ensure continuous health care access to the nearly 72,000 Iowans relying on those health plans.

The state's individual insurance market -- which unraveled quickly in the spring -- has been in the national spotlight as Congress decides how to move forward with the repeal and replace of the Affordable Care Act.

The proposed stopgap measure -- which still must be approved by the Centers for Medicare and Medicaid Services -- would provide consumers with age- and income-based tax credits as well as use a reinsurance mechanism for costly medical claims. The state has asked for a response from the federal government within the next 14 days.

Iowa Insurance Commissioner Doug Ommen said he believes these measures will entice back younger and healthier Iowans who were driven out of the marketplace by rising premiums. It also would better spread out the high costs individuals with serious health needs can create.

"I view this as the single option that will restore insurance availability in all 99 counties," Ommen said during a Monday morning news conference. "There will be obstacles and this will be an uphill climb, but we're optimistic we will be able to provide some coverage."

The stopgap measure is intended to keep individual health insurance options in place through 2018, Ommen said. It may result in higher premiums for some older and middle-aged consumers, he added, but he is primarily concerned with keeping the market afloat.

"Rate increases are driving individuals out of the market," he said. "Additional rate increases aren't the answer. This is designed to stabilize the rates, re-establish the value for younger people and address problems with those who have serious health issues."

The state could apply for an extension of the measure should the federal government not pass legislation to repeal and replace the ACA.

Iowa Republican Sens. Joni Ernst and Chuck Grassley said Monday they support the proposed plan while Congress works on a more long-term solution.

"This proposal by Iowa's Insurance Division is a necessary, short-term move," Ernst said in a statement. "In the meantime, we must continue working to find a permanent solution. As with any reform, we must ensure that it is done thoughtfully and carefully, but also with close attention to how it will affect insurance availability in 2018 and beyond.

"Making sure Iowans have access to affordable coverage is, and will continue to be, my No. 1 priority when reviewing any proposed health care legislation."

The GOP-backed American Health Care Act has passed the U.S. House and but its future still is unclear as it is currently being reworked in the Senate. It is expected to be voted on by the end of June.

However, the June 19 deadline for insurers to file individual insurance rates with the Iowa Insurance Division is one week away, and Ommen said the federal government needs to step in to address the crisis.

In April, Wellmark Blue Cross and Blue Shield and Aetna announced they would stop selling individual health insurance plans on and off the ACA exchange in Iowa in 2018, affecting nearly 58,000 people. Both insurers cited high costs -- Wellmark lost nearly $90 million -- and the uncertainty of the ACA's future.

Then in May, Minnesota-based Medica -- which sells plans in a majority of Iowa counties -- hinted it may follow Wellmark and Aetna's lead if action isn't taken. On Monday, the insurance company said it still is analyzing the proposal and has not yet made a decision.

"The Iowa Insurance Department proposal includes some important provisions to stabilize the market that we have asked for, particularly a robust state reinsurance program," said Geoff Bartsh, Medica vice president for individual and family business, in a statement.

"However, the proposal includes other provisions, including significant changes to the subsidy structure that will have an impact on which consumers do and don't buy coverage. We are still analyzing those changes to help our decision-making should this proposal be approved."

The stopgap measure was designed in partnership with the Iowa Insurance Division, Wellmark and Medica, the agency said. Ommen and Wellmark Chairman and CEO John Forsyth discussed the proposed stopgap measure with CMS last week in Washington, D.C.

Wellmark has said in the past that if the state and federal government were to provide certain fixes -- including age- and income-based subsidies as well as reinsurance -- that it would re-enter the individual Iowa market. Ommen hopes, if approved, the plan is attractive enough to draw other insurers to the state.

Reinsurance is a way to better spread out high health care costs beyond the individual market. The sickest Iowans would stay with their health insurer, but a base of federal funding that is administered by the state would help cover costs incurred by a person above a certain amount in a calendar year.

"Wellmark is supportive of the plan submitted to CMS," the company said in a statement. "If it is approved in a reasonable time frame, Wellmark will re-enter the individual health insurance market in all 99 Iowa counties in 2018."

The health coverage sold under the stopgap measure will include all the Essential Health Benefits of the ACA and any additional benefits required by Iowa law as well as protect consumers from annual and lifetime caps.

"This is not a perfect plan," Ommen said. "We are attempting to thread the needle between the ACA and having insurance available."

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