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Impact of Obama announcement limited in Iowa

Impact of Obama announcement limited in Iowa

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President Barack Obama's announcement Thursday that allows a one-year renewal of insurance policies that had been canceled because of the Affordable Care Act will likely have little impact in Iowa.

That's because relatively few policies had been canceled in the first place.

Across the country, millions of people have received cancellation notices because their policies didn't meet new standards set out in the Affordable Care Act. And while it's a relatively small percentage of the total population, the cancellations have caused a political firestorm for a president who had promised people that if they liked their coverage, they could keep it.

The president's announcement means insurance companies can renew policies subject to approval of state insurance commissioners.

In Iowa, however, the Iowa Insurance Division previously said that only about 1,000 people received such cancellation notices.

That's because earlier in the year, Wellmark Blue Cross/Blue Shield had told their individual and small-group policy holders they could extend their non-grandfathered plans through 2014.

In Illinois, a spokesman for the state's insurance director said he was studying the issue. The state hasn't said how many people have had policies canceled.

Blue Cross Blue Shield of Illinois is examining the issue, too. It didn't say whether it would renew plans.

"We are exploring the possibilities," said Greg Thompson, a spokesman for the operator of Blue Cross plans in Illinois and four other states.

Blue Cross has the largest number of individual plans in the state.

The insurance industry's association, America's Health Insurance Plans, warned the development could disrupt markets.

Meanwhile, an official from one of the two marketplace insurance plans operating across Iowa expressed misgivings.

"Obviously, we're a little disappointed. We were kind of hoping we were past the days of pre-existing conditions and coverage limitations and onto the days of managing risk instead of avoiding it," said David Lyons, chief executive officer of CoOportunity Health.

Insurers are concerned that by allowing people to renew their plans, that will limit the number of younger, healthier people who buy coverage on the exchanges.

That healthier customer base is needed to balance the enrollment of older, sicker people, experts say.

If that doesn't happen, the cost of insurance will go up, making it less affordable.

Politically, meanwhile, there was a mixed reaction to the president's remarks among Democrats.

Sen. Tom Harkin, D-Iowa, who has been an avid defender of the health care law, said Thursday he wasn't certain he would have done the same thing as the president did. Instead, he encouraged people to shop in the online marketplace rather than automatically renew their policies, which he said in many cases were "not worth the paper it was printed on."

Rep. Cheri Bustos, D-Ill., praised the president's announcement.

"The Illinoisans I represent and the American people rightly expect their leaders in Washington to keep their word. It’s all you have," Bustos said.


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