Iowa Makes Final Plea To Bolster Sagging ACA Market

Without action from the federal government, 20,000 Iowans likely will not be able to afford insurance through the Affordable Care Act marketplace in 2018, the Iowa Insurance Commissioner warned Tuesday.

Commissioner Doug Ommen submitted the state's final plea to the federal government, asking for permission to make changes he believes will buoy the Iowa's struggling ACA marketplace.

This November, the majority of the 72,000 Iowans purchasing plans through the exchange will have only one option - Minnesota-based Medica. Last week, Medica asked the state for an average rate increase of 56.7 percent due to the uncertainty over cost-sharing reductions.

The federal payments are made to insurers to help cover costs and expand access for low-income individuals, but the future of the payments are now in jeopardy.

The stopgap proposal - complete with letters from Gov. Kim Reynolds and the Republican Congressional delegation asking for a timely approval - seeks to provide consumers with age- and income-based tax credits as well as use a reinsurance mechanism for insurers for costly medical claims.

Several hospitals and health systems support the stopgap proposal.

Ommen said the proposal is not meant to fix all the issues but he believes it can stabilize the market by bringing more healthy and young individuals into the ACA marketplace, which would help better spread out costs. In addition, the use of reinsurance would attract insurers back to the marketplace, he has said.

Des Moines-based Wellmark Blue Cross and Blue Shield - the state's largest insurer - has committed to coming back into the marketplace if the measure is approved.

One of Ommen's primary concerns, he said, are those purchasing insurance through the exchange and living above the 400 percent poverty level - about 28,000 people - and who therefore are not eligible for subsidies. They likely would not be able to afford coverage and either leave the insurance market or the state, he said Tuesday during a news conference.

"People who depart will be healthy and that will leave us in an even worse circumstance," he said.

The insurance division said that a 55-year-old couple making $65,000 a year could pay as much as $33,000 annually for premiums.

"The economic impact on Iowa would be catastrophic for Iowa families, and we need the Iowa Stopgap Measure approved to help keep these individuals in our market so it can function," Ommen said.

The federal government has not given the insurance division any indication if or when it will approve the proposal, Ommen said, but the state agency is moving forward as if it was given the go-ahead as open enrollment is a little more than two months away.

He added that the insurance division has worked closely with the federal government to alleviate officials' concern since his initial proposal was submitted earlier this summer.

That two-month time crunch concerns Karen Pollitz, a senior fellow at the Kaiser Family Foundation who studies health reform and private insurance. The state no longer will be able to sell insurance through healthcare.gov - the federal website that sells ACA plans - she said.

Instead, Iowans will purchase insurance directly from the carriers offering the stopgap plans, according to the insurance division.

"Iowans will need to first complete an eligibility application through the state-run eligibility portal and be determined eligible prior to being able to purchase coverage directly from the carrier," said Chance McElhaney, an agency spokesman. "We have a URL secured and are already in progress of getting that ready to go-live for open enrollment."

Insurers also would have to submit new rates by Sept. 8, according to the proposal, and the insurance division would have to review and approve rates by the end of September.

Kaiser's Pollitz also had concerns over premium increases, especially for older and lower-income Iowans, as well as over the number of current law requirements the state is asking to have waived.

She is bothered, in part, that cost-sharing reduction funds would be redistributed.

Cost-sharing reductions help individuals living below 250 percent of the federal poverty level afford out-of-pocket health care costs. About 28,000 Iowans received these subsidies in 2016.

"It's a little bit of a puzzle," she said.