Is Iowa’s ACA Insurance Market A Sign Of What’s To Come Nationally?

Iowa's insurance market could be the canary in the nation's coal mine if Congress or President Donald Trump doesn't offer clarity soon on the future of the Affordable Care Act, with millions of people losing coverage, one industry expert said Friday.

Two insurers announced this week that they would stop selling individual health plans both on and off the Iowa exchange - Des Moines-based Wellmark Blue Cross and Blue Shield on Monday and Aetna on Thursday. The decisions affect some 57,600 Iowans - 21,400 Wellmark policy holders and 36,200 policy holders with Aetna.

It also leaves the vast majority of the 50,000 Iowans purchasing subsidy-eligible insurance on the exchange with only one option - Minnesota-based Medica. But that insurer is tight-lipped on what it plans to do in 2018, saying Thursday that it is "evaluating the situation and (its) options."

"Iowa is a bit different in that it's happening so early," said Cynthia Cox, associate director for the program for the study of health reform and private insurance at not-for-profit Kaiser Family Foundation. "But it might be the start of many more exits to come."

Iowa has never shown up in any of the health care policy organization's lists of states with fragile markets. States such as Tennessee, Arizona and Oklahoma have had steep premium increases and seen insurers drop out.

"This goes to show that political uncertainty can make an otherwise stable market unstable overnight," she said.

The problem Wellmark, Aetna and other insurers face is that not enough young and healthy people are choosing to enroll in plans to help spread out costs. Instead, older, sicker individuals with multiple chronic illnesses - who need insurance and coverage - are purchasing the health plans, putting a high concentration of expenses in the individual market.

Wellmark said on Monday it lost $90 million through the individual market in Iowa.

There's also quite a bit of uncertainty still looming over the future of the ACA. Trump and Congressional Republicans have promised to repeal and replace President Barack Obama's signature health care legislation, but have been stalled by disagreement over the changes they will make.

Insurers have said the unpredictability over which rules will be in place in 2018 - and over the billions of dollars in government subsidies that make the plans more affordable to millions of people - make it difficult to commit to offering such insurance.

Many have asked the government to extend the subsidies for 2018.

This comes as health insurers are preparing 2018 premium rate proposals to submit to federal and state insurance regulators over the next few months.

Whether Medica will stay in Iowa is hard to say, Kaiser's Cox added. Several states have only one insurance option on the exchange - but that insurer typically is the Blue Cross and Blue Shield plan, which are more established.

Medica is a significant player in Minnesota, Cox noted, and it has expanded into additional markets including Iowa and Kansas.

"But it's not clear if they have capacity to absorb all the enrollees in Iowa," she said. "It puts them in tough spot."

If Medica were to drop out, there isn't much in terms of a Plan B. Iowans could purchase plans off the exchange without subsidies, but Iowa insurers are pulling out of that market, too.

Trump has indicated he will not enforce the mandate or penalize those without insurance.

But that is hardly a relief if you are sick and in need of medical care, Cox said.

"This is warning sign," Cox said. If Congress "doesn't act soon, ... we can see this happen around the country."