Uncertainty over the Trump administration's willingness to continue a set of Affordable Care Act subsidies has prompted Minnesota-based Medica to propose even higher premiums in Iowa next year.
Medica, the only insurer to express a willingness to participate in Iowa's ACA marketplace next year, said Wednesday it had filed an amended rate request with the Iowa Insurance Division.
The company is asking that premiums for silver plans be increased by an average of 56.7 percent. Previously, it had asked for a 43.5 percent increase.
The company said uncertainty over what are called cost-sharing reduction payments led to the request for higher rates.
The Trump administration has sent conflicting signals on whether it will continue with the payments, which are made to insurance companies to help bring down the cost to low- to moderate-income consumers of deductibles, co-pays and out-of-pocket expenses.
President Donald Trump proposed in a tweet that Obamacare be allowed to "implode" in order to force Democrats to negotiate on an ACA replacement.
More than 24,500 Iowans get cost-sharing assistance, Medica said.
"We remain hopeful the federal government will fund the cost sharing reductions, but we are working with the Iowa Insurance Division to help consumers understand the implications of this lack of funding," Geoff Bartsh, Medica vice president of individual and family business, said in a statement Wednesday.
Medica said the additional increase would apply only to silver plans. There are four different levels of plans.
In order to qualify for cost-sharing subsidies, people have to enroll in a silver plan and have incomes between 100 percent and 250 percent of poverty, or $20,420 and $51,050 a year for a family of three. The cost-sharing subsidies are separate from tax credits, which lower the cost of premiums for consumers.
Earlier this week, the Congressional Budget Office said that ending cost-sharing payments would, on net, increase the federal deficit by $194 billion over 10 years because insurers would likely react by raising premiums on silver plans to cover the loss of funding.
Because the cost of silver plans are what determine the level of premium tax credits, higher premiums would mean more spending on the credits, which are available to people making up to four times the poverty line, or $81,680 a year for a family of three.
Medica's proposal is subject to the state insurance division's approval.
In June, the division asked the Trump administration for permission to go ahead with its own stopgap proposal to stabilize Iowa's individual insurance market. The proposal would create a single standard plan to be offered by each insurance carrier in the market and use federal funds to restructure premium tax credits and put in place a reinsurance program for high-cost patients.
The state made the proposal after it appeared there might be no insurer willing to participate in Iowa's marketplace next year. Even after Medica's filing, the division expressed concern the company's rate increase proposal would drive younger, healthier people out of the market.
The division's request is still pending before the Trump administration.