The State of Iowa submitted its official request to change the rules for individual health insurance next year in an effort to keep middle-income Iowans buying health plans one more year.
Keeping those people from dropping their insurance is vital to making plans available to lower-income people who receive federal subsidies, Iowa Insurance Director Doug Ommen said Tuesday.
“The prices have gotten so ‘shocky’ that there will be people who will make those choices,” Ommen said during a conference call.
Iowa’s “stopgap measure” is up for approval by the U.S. Centers for Medicare & Medicaid, designed to be in effect when enrollment for 2018 starts on Nov. 1. Federal officials have not said when they would act on the request.
The stopgap measure would guarantee coverage and include the ACA’s “essential health benefits.” Consumers would buy a standard health plan with available subsidies directly from insurance companies instead of through the ACA exchange.
The plan also would set up a reinsurance program for large health claims so that more companies would be willing to sell health plans in the state.
Ommen said 72,000 Iowans get their health plans through the Affordable Care Act, also known as Obamacare. Of those, 28,000 pay for their coverage, and the rest qualify for federal subsidies that reduce their monthly premiums substantially.
Without the changes, he said, between 18,000 and 22,000 people who pay for the insurance will decide to drop it next year, according to an independent study of the plan. People with serious illnesses would be more likely to buy coverage, Ommen said.
The stopgap measure, Ommen said, “makes it affordable at a time when the Affordable Care Act has made it largely unaffordable for most people in the middle class.”
Without it, he said, insurance companies also would be unwilling to come back into the Iowa market.
So far, only Medica Health of Minnetonka, Minnesota, plans to offer the ACA plans in Iowa next year, at monthly premiums 57 percent higher than it is charging this year.
People who qualify for subsidies would pay about the same, but people who have moderate incomes and pay their own premiums would bear the entire brunt of the increases, Ommen said. For example, a 55-year-old couple with an income of $65,000 a year would face annual premiums of $33,000.
Ommen said his office is talking with “multiple carriers” about offering coverage in 2018 if the stopgap measure is approved.
Nebraska has not applied for a waiver from the ACA rules. The plans discussed Tuesday by Ommen do not affect Iowans insured through their employers, government-sponsored plans such as Medicare or individual plans that have been grandfathered in since the ACA took effect.
The stopgap measure would not help Iowa’s health plans in 2019, he said, so Congress needs to act to stabilize the health insurance markets.
As for Iowa next year, he said, without the changes, “it can’t work.”
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