Dan and Melissa Killinger have some very tough choices to make in the coming weeks.
Melissa purchases her health insurance on the state’s Affordable Care Act exchange. A disability has left the 63-year-old Cedar Rapids resident unable to work.
Instead, she collects Social Security — about $805 — and uses that to help pay for living expenses and her health care plan. The plan’s premium costs $647 a month while she has an in-network deductible of $6,075.
But soon that health care plan will end, and Melissa will have one option — Minnesota-based Medica, which will increase rates by an average of 57 percent next year for 2018.
“It’s not a crack that we’re falling through,” Dan Killinger said, “it’s a sinkhole.”
The two have to decide: Do they keep her insurance and pay the high premiums, or do they roll the dice and go without, and instead pay the federal fines or pay high out-of-network costs?
That’s a question thousands of other Iowa families will grapple with in the coming weeks. Former Insurance Commissioner Nick Gerhart once said that if he purchased insurance through the exchange, he might roll the dice and choose to pay fines rather than ever-rising premiums.
Open enrollment is scheduled to begin Nov. 1, and run through Dec. 15.
Now that a last-ditch effort by the state has been scrapped, the state insurance division believes that 22,000 Iowans will drop out of the market. Iowans making 400 percent or more above poverty line — those not eligible for subsidies — will be hit especially hard.
But Dan Killinger does not believe that’s an option for his wife. She has suffered multiple strokes that require her to take physical and occupational therapy and need ongoing care.
Dan, 66, who is on Social Security and Medicare, is Melissa’s full-time caretaker — a job he happily accepts.
“We’ve been married for 40 years,” he said. “I want to help improve her quality of life and will do whatever I can financially and physically because I love her.”
He worries that might mean only being able to afford basic doctor’s bills and prescriptions.
“We’ve worked hard since high school,” Dan said. “My wife worked when she could. We’re not asking for a handout, we’re just looking for a common-sense health system.”
The state’s Insurance Division believed that’s what it was seeking when it applied for a federal waiver it thought could help the struggling individual market. The plan would have offered age- and income-based incentives to draw more young and healthy people into the insurance pool as well as use reinsurance to help spread out costly medical claims.
The plan was supported by multiple health insurers and larger providers, including the University of Iowa Health Care. But some critics said the plan would take subsidy money away from low-income Iowans and redistribute it to insurance companies and more well-off individuals.
The state submitted the stopgap proposal over the summer. But it announced Monday that it would withdraw application after the Trump administration informed the state it was still “several weeks” away from determining how much federal funding Iowa might receive — a key part of the proposal.
Insurance division officials were disappointed by the outcome, and Gov. Kim Reynolds spent Tuesday in Washington, D.C., talking with federal officials about possible short-term health care solutions.
Some experts argue the state could stabilize the market if it were to phase out the more than 70,000 transitional and non-compliant grandfather plans sooner rather than later, which could push healthier enrollees into the ACA market.
Meanwhile, the Iowa Insurance Divisionencourages those purchasing insurance through the exchange to work with an insurance broker to see what options are available. Medica said consumers need to determine if they qualify for a premium subsidy, which can reduce costs.
About 75 percent of Iowans purchasing ACA-compliant plans will be eligible for tax credits that grow as premiums increase.
Despite the twists and turns of this year regarding federal legislation that would repeal and replace the ACA; the Trump administration announcing it no longer would fund federal payments to insurers that help cover low-income individuals’ health care plans; and the stopgap measure failing, Medica said it’s ready to go on Nov. 1.
“We certainly understand the state’s desire to improve the individual market in Iowa, and we are appreciative of being a part of those discussions,” the company said in a statement. “While this is not the preferred outcome for the state of Iowa, we want consumers to know that Medica is ready.
“We have been in preparation to serve as the only individual insurance carrier in Iowa since our filing in June.”