Computer screen healthcare.gov

Enrollment began Sunday for the Health Insurance Marketplaces. Those in Iowa and Illinois sign up by using the healthcare.gov website.

CONTRIBUTED PHOTO

President Donald Trump only announced late Thursday he was ending cost sharing subsidies for Affordable Care Act policies, but Iowans got an idea what the impact would be two months ago.

In August, Minnesota-based Medica announced that it was proposing to raise the average premium on its silver insurance plan in the marketplace by 56.7 percent for 2018, about 13 percentage points higher than it previously planned.

At the time, the company said the bigger boost in prices was due to the uncertainty over the future of cost-sharing funds.

So this latest announcement, while unwelcome for insurers who have been lobbying for the federally funded subsidies to continue, wasn't a big surprise.

"The bottom line is that we anticipated this action in our filings and we are prepared," said Geoff Bartsh, Medica's vice president of individual and family business.

The controversy over cost-sharing subsidies has simmered in Washington, D.C., for months. Republicans claimed they aren't legal, while Democrats defended them and said killing off the funding would hurt people.

In Iowa, about 25,000 people of moderate means qualify for them. But the payments go directly to insurance companies to defray out-of-pocket costs.

People who qualify for premium tax credits (meaning those who make up for four times the poverty level), will be sheltered from the increased premiums because the value of the tax credits will rise as premiums do. However, for those who don't qualify for the credits, or who don't buy their insurance on the exchanges, prices will go higher.

Big price spikes and insurers dropping out of Iowa's individual insurance market already prompted Iowa's insurance division to ask the Trump administration earlier this year to approve a "stopgap" plan" that would revamp the marketplace.

Since then, regulators have been citing rising premium prices to push for the plan's approval.

"Basically, anyone paying full freight of their premium (above 400 percent FPL) will be priced out of the market," Chance McElhaney, a spokesman for the Iowa Insurance Division, said Friday.

The state's plan would create a single standardized plan, a new system for premium tax credits and a reinsurance pool for high-cost customers.

The Trump administration still hasn't made a decision on the request. And McElhaney said the administration's decision Thursday to end federal funding for cost-sharing subsidies won't affect the proposal because the state isn't counting on that funding stream to pay for the plan.

However, the decision to end the subsidies did set off a political skirmish Friday. Democrats were critical of the decision. U.S. Rep. Cheri Bustos, D-Illinois, said it represents Trump breaking his promise to provide less expensive health care.

"There is no gray area here," she said.

The Trump administration defended its decision. It said that the payments, which have been challenged in court by congressional Republicans, had not been the subject of an appropriation and therefore are not legal.

About 7 million people nationwide benefit from the cost-sharing subsidies, according to the Kaiser Family Foundation. In Iowa, about half the people who purchased policies in the ACA marketplace qualify for them.

People who make up to 2½ times the poverty level qualify.

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