Iowa's insurance commissioner is seeking federal approval for a plan to deal with Iowa's struggling individual insurance market, arguing it's the only sure way of getting participation next year and avoiding the prospect that 72,000 Iowans will have no choices for coverage.
Doug Ommen unveiled the plan Monday, which asks the federal government to divert $352 million in anticipated federal funding for 2018 to a restructured system of premium tax credits and a state-run high-risk pool.
The plan would mean insurers would offer a single, standardized insurance plan to Iowans who get their coverage in the individual market. It would be similar to a mid-level plan that can now be purchased on the Affordable Care Act marketplace, and it would cover pre-existing conditions and eliminate annual or lifetime caps.
However, according to data from the commissioner's office, it also is expected to offer premiums that are higher for older Iowans than what they paid for coverage this year.
The plan would not utilize the healthcare.gov marketplace, which has been the portal to buying insurance, especially for people who rely on the premium tax credits to lower their premiums.
Ommen, who called the proposal a stopgap measure, emphasized the plan is aimed at avoiding the prospect that no insurers would offer plans in Iowa next year.
"We have a collapsed market here," he told reporters Monday.
He also said the plan is aimed at enticing younger, healthier people to buy coverage, thus improving the overall risk pool.
Iowa's individual market has been bleeding insurers this year. Wellmark Blue Cross & Blue Shield and Aetna both said earlier this year they weren't going to sell Affordable Care Act-compliant policies in Iowa in 2018, and Minnesota-based Medica, the only other insurer selling policies statewide, indicated it would have a difficult time taking part, too.
That left the state with the prospect of having no carriers in the individual market. The state has been working on a plan to deal with the struggling marketplace, and Ommen said he is "optimistic" the plan will be approved by the federal government.
Wellmark said Monday that if the proposal is approved in a timely manner and held to the principles in the request, it would sell the standardized plan in all 99 counties in 2018.
Ommen, Wellmark Chairman and CEO John Forsyth and Medica Vice President Geoff Bartsh discussed the proposal last week with the federal Centers for Medicare and Medicaid Services.
In a statement Monday, Medica did not commit to whether it would participate in Iowa under the plan.
“The Iowa Insurance Department proposal includes some important provisions to stabilize the market that we have asked for, particularly a robust state reinsurance program,” Bartsh said. “However, the proposal includes other provisions, including significant changes to the subsidy structure that will have an impact on which consumers do and don’t buy coverage."
The plan is laid out over 33 pages on the insurance division's website. Public comments are invited at iid.iowa.gov/proposedstopgapmeasurepubliccomments.
It's not clear yet how long it might take the federal government to respond to this new proposal. The Centers for Medicare and Medicaid Services declined to comment. However, earlier this year, President Donald Trump signed an executive order telling federal agencies to grant more flexibility, consistent with the law, to states. The insurance division cited the executive order in its request Monday.
Ommen estimated the high-risk pool, which would be run through the existing HIPIOWA plan, would cost $80 million. The division estimated premium subsidies would cost $220 million.
There would be no cost-sharing subsidies offered to bring down out-of-pocket costs. Those have typically gone to lower-income people. About $48 million in cost-sharing subsidies are going to Iowans in 2017, according to an estimate cited in the proposal.
The proposal estimated that, under the new plan, the tax credits would reduce premium costs, as they do with the Affordable Care Act. However, in a chart that laid out projected costs by age and income, premiums still would be higher than they were for 2017 in most cases.
For a 29-year-old, who makes two to two-and-a-half times the poverty level, the premium after tax credits would amount to $181 per month, versus $144 in 2017. For people who are older, however, the gaps would be larger. For a 50-year-old at the same income, the premium after tax credits next year would be $244, versus $144 this year.
Rep. Dave Loebsack, D-Iowa, had proposed that if there were no insurers selling in Iowa for next year, that Iowans be allowed to purchase coverage on the individual marketplace in the Washington, D.C., area. That is where members of Congress and their staff members buy coverage.
He issued a statement Monday saying he's "pleased that folks are now working to bring ideas to the table." But he did not venture an opinion on the state's proposal.
Sen. Chuck Grassley, R-Iowa, said he has spoken to the administrator for CMS, Seema Verma, about the proposal and the state needs its approval on a stopgap while Congress works on a long-term solution.