Iowa Insurance Commissioner Doug Ommen announced Monday that the state is withdrawing its "stopgap" proposal to revamp the Affordable Care Act marketplace in the state.
Ommen made the announcement at a news conference Monday afternoon in Des Moines with Gov. Kim Reynolds.
"I'm extremely disappointed," Reynolds said.
The withdrawal comes only a week before this year's ACA enrollment period will open and despite the state insurance division's warning that without the plan, up to 22,000 Iowans will drop out of the individual insurance market.
Ommen said Monday that the Trump administration had informed the state last week that it was still "several weeks" away from determining how much federal funding the state might receive as part of plan.
Iowa had proposed using federal premium tax credits that typically go to qualifying individuals who make less than 400 percent of poverty and restructuring them so people above that line would get help too.
There also would have been a reinsurance pool formed to help with high cost customers, and a single, standardized mid-level plan would be offered to Iowans. Wellmark Blue Cross and Blue Shield, the state's largest insurer, had said it would participate if the plan was approved.
Ommen and Reynolds blamed the Affordable Care Act for the situation Monday, especially the part of the law that allows states to seek waivers to form their own plans.
"It just does not afford the flexibility that we need to be creative," Reynolds said.
Reynolds praised the Trump administration, including President Donald Trump, for working with the state. But the state's announcement also comes about two weeks after the Washington Post reported that the president had personally called the Center for Medicare and Medicaid services in August to direct that the state's application be denied.
White House critics have said the president is seeking to undermine the Affordable Care Act, and Iowa was cited as an example. Ommen said during the news conference that he thought Iowa was given fair consideration.
Newly installed state Senate Democratic Leader Janet Petersen of Des Moines said Democrats are ready to work with Reynolds to find a workable, bipartisan solution. But, so far, she said, Republicans “have done everything possible to undermine Obamacare.”
But Republican Party of Iowa spokesman Carlos Cruz said the blame falls to the failure of Obamacare — and he applauded Reynolds and Ommen for trying.
State Sen. David Johnson, an Ocheyedan independent, said the situation calls for presidential leadership but the current approach appears to be to allow Obamacare to fail in hopes the GOP-led Congress will replace it.
“I don’t believe that’s a winning strategy — that failure leads to success,” Johnson said.
Monday's announcement means that Minnesota-based Medica will be the only insurer in the marketplace in Iowa for 2018. Ommen said the company will sell policies in all 99 counties.
However, premiums will be significantly higher. Medica said its rates would go up about 57 percent in 2018. State officials complained that this large of an increase would significantly hurt people who don't buy their insurance in the marketplace or who don't qualify for federal tax credits.
On the state insurance division's web site, dozens of Iowans have complained about price increases.
In a statement Monday, Medica said: "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. 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.
When it proposed its rates initially, Medica said its increase reflected the "number of risks" that remained in the marketplace. Those include the loss of federal cost-sharing funds aimed at lowering out of pocket costs for low-income people.
As the enrollment opening has approached, there has been nervousness about when the federal government might provide an answer to the state's request. Ommen said Monday that Iowa had been told it would be "several weeks" before the amount of federal funding would be determined. "We need to move forward, giving Iowans certainty," Ommen said.
Just last week, the Center for Medicare and Medicaid Services also sent the state a letter saying that as a condition of approval Iowa would need to ensure "sufficient funds" to operate its plan. Waivers are only permitted if they don't increase the deficit, and the letter, dated last Thursday, said the federal government would make those determinations annually.
The stopgap plan was initially unveiled as a temporary measure in June after Wellmark and Aetna both announced they would not participate in the Iowa marketplace for 2018.
That opened up the possibility that there would be no insurer in Iowa in the individual marketplace and that 72,000 Iowans would have nowhere to turn for coverage.
Most Iowans, who receive their coverage via their employers or from government plans, would not be affected. Shortly after the state unveiled its stopgap plan, though, Medica said it would again participate in 2018.