Thousands of Iowans will be able to afford and maintain health care coverage through Iowa’s Affordable Care Act exchange if federal regulators approve the stopgap measure submitted earlier this year by the state’s insurance commissioner, according to an economic analysis released Thursday.
The independent analysis, completed by Arizona-based actuarial consulting group NovaRest, looks at the availability and affordability of health insurance with and without the stopgap measure implemented.
“The analysis clearly finds that the Iowa Stopgap Measure is a better alternative for Iowa than the ACA,” Iowa Insurance Commissioner Doug Ommen said in a statement. "The Iowa Stopgap Measure will help tens of thousands more Iowans have coverage."
He later told The Gazette that he expects final approval for the measure.
In June, Ommen submitted the proposed stopgap measure — yet to be approved by the federal Centers for Medicare and Medicaid Services — that would provide consumers with age- and income-based tax credits as well as use a reinsurance mechanism for costly medical claims.
Ommen thinks the tax credits will bring in more healthy and young individuals to the Affordable Care Act marketplace, which would help spread out costs. In addition, the use of reinsurance would attract insurers back to the marketplace, he has said.
Minnesota-based Medica is the only remaining insurer selling statewide plans, but Wellmark Blue Cross and Blue Shield has committed to returning to the marketplace if the measure is approved. Medica is seeking an average rate increase of 43 percent, a number that could grow if cost-sharing reductions were to disappear.
The analysis found that if things remain as they are — that is to say, the stopgap is not approved — it’s likely that 3,000 to 4,000 Iowans will reduce their coverage level in 2018, and another 300 to 400 would follow suit in 2019, to purchase more affordable coverage.
What’s more, NovaRest thinks that 18,000 to 22,000 people will drop coverage and become uninsured in 2018, and another 28,000 and 30,000 will do so in 2019.
If the stopgap measure is approved, however, NovaRest projects that between 4,000 and 6,000 people will drop coverage in 2018.
In addition, the analysis found that, for individuals and families living above 400 percent of the federal poverty level — about 28,000 Iowans — premiums will become unaffordable if the stopgap is not implemented.
“For an individual adult starting at age 20, their income would have to exceed $50,000 to afford the second lowest Silver plan, and for an older adult, starting at age 48, the individual’s income would have to exceed $100,000 for the same plan,” the analysis stated.
“When you look at rates under the ACA with an average 43 percent increase, it would significantly impact Iowans above the 400 percent poverty level,” Ommen said Thursday night in Cedar Rapids at a public hearing on the stopgap measure. “That’s really important for us as a state — that is a real hardship to be looking at a premium of $30,000 a year as a couple.
“The problem is, it’s a hardship for people, the price has gotten to the point where people will leave the market. You need healthy people to cover the costs.”
Ommen said the Insurance Division is in the process of putting together the final waiver application for CMS approval, adding the agency is moving forward as if the measure is approved.
“I take to heart what’s being written” in the public comment, he said. “What’s happening is not acceptable, and it really motivates me to find a solution.”