New short-term health plans coming for Iowans, more under consideration
The state insurance regulator has approved the sale of two 364-day health plans by
These plans -- one of which will be renewable for up to three years -- are targeted to individuals who are priced out of the individual health insurance market through the ACA, the Obama-era marketplace.
"As the ACA individual health insurance market has become unaffordable for anyone not utilizing federal subsidies,
According to Iowa Insurance Division data, about 34,000 individuals dropped from the off-exchange individual market between 2016 to 2018. In addition, roughly 4 percent of Iowans were uninsured in 2017.
Each of these groups possibly could benefit from the proposed plans, insurance officials said.
Short-term, limited-duration coverage was created to fill gaps that occur when an individual is transitioning from one plan to another, such as those between jobs or young adults coming off their parents' plan.
But according to the Iowa Insurance Division, ACA coverage has become so unaffordable for some that a federal change in the law was needed.
In
The rule reversed previous ACA law that capped these plans at three months.
This law went into effect on
The Iowa Insurance Division adopted administrative rules allowing these plans in
The Iowa Insurance Division said these products should be entering the market "in the coming months at the carrier's discretion."
"Rates will vary by company and individual," said
"These types of plans may be an affordable option for those Iowans that are priced out of the ACA market, and Iowans should talk with a licensed insurance agent to see what would fit their individual needs and budget," he said.
Additional 364-day short-term limited-duration health plans are "currently being reviewed" by the Insurance Division, officials said.
"Contrary to some national talking points, all short-term, limited-duration policies are not 'junk' plans," Ommen said in the news release. "Every state has the authority to ensure minimum standards and consumer protections.
"Under
According to the administrative rule, these plans must provide coverage up to an aggregate maximum of
Services required under these plans include:
--Emergency room services
--Surgical services
--In- and out-of-hospital care
--Treatment for functional nervous disorders, mental and emotional disorders and substance use disorders
--Out-of-hospital prescription drugs and medications.
Ommen emphasized in his statement that any policy longer than six months in duration is required to provide preventive and wellness services.
"The need for options like 364-day short-term limited-duration plans comes from the structural flaws of the ACA, which the Iowa Insurance Division has continually called on
Ommen has long called for a fix of these "structural flaws," which he said includes a lack of a predictable reinsurance mechanism, an income-only-based subsidy design and an age banding limitation.
These flaws raise the cost for some Iowans, driving them out of the market and leaving Iowans with persistent health conditions to pay high rates, 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," Ommen said in the release.
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