Iowa Insurance Commissioner Doug Ommen has proposed a ‘stopgap’ plan to shore up the state’s teetering market for individual health insurance policies. Tony Leys/The Register
The Iowa Insurance Division’s “stopgap” proposal to shore up the state’s shaky market for individual health-insurance policies.(Photo: Tony Leys/The Register)Buy Photo
Glen Gardner is fed up with the turmoil rocking Iowa’s health-insurance market.
The Cedar Rapids resident received a stark letter in June from his insurance carrier, Aetna, notifying him the company would no longer sell individual health policies in the state. In bold type at the top, the letter warned: “Your health insurance is ending on December 31, 2017.”
The letter promised Gardner would receive more information in the fall about how to enroll in another carrier’s coverage. No such information has arrived, because the details of such options are in flux.
“Here it is, three weeks before the enrollment period, and I have no idea. Zip. Zero. Nothing,” he said. “It’s absurd.”
Gardner and tens of thousands of other Iowans are anxiously awaiting the outcome of last-minute negotiations over state regulators’ “stopgap” proposal to shore up Iowa’s health-insurance market. Iowans heard last week that President Donald Trump allegedly demanded his administrators reject the proposal, which would rewrite key rules of the Affordable Care Act. The president wants to repeal the law, also known as Obamacare. He has said Republican politicians should let Obamacare collapse in order to build support for the repeal effort.
Glen Gardner of Cedar Rapids (Photo: Special to The Register)
Just one carrier, Medica, plans to sell individual health-insurance policies in Iowa under current rules, which will remain in place if the state’s stopgap plan is rejected. Medica plans to raise its premiums by an average of nearly 58 percent.
But many of the consumers, including Gardner, would be sheltered from much of the increased premium, because they qualify for sliding-scale subsidies under the Affordable Care Act. But little solid information is available to consumers about rates or coverage, because no plans have been approved. Gardner said he and his wife, Lauren Shuster, can’t go without insurance. He had surgeries for skin cancer this summer and he worries about a recurrence. His wife has had several bouts with Lyme disease.
Gardner, 61, is a self-employed marketing consultant. He’s a registered Democrat, but he said he’s not a particularly partisan person. He just wants government and industry leaders to put their heads together and find a path forward for consumers who otherwise might go uninsured.
“I don’t care if it’s Obamacare or Clintoncare or Trumpcare,” he said. “…I just can’t understand the reason for this, other than a political dogfight.”
The open-enrollment period, which in the past has lasted three months, was cut to six weeks by federal officials. It is slated to start Nov. 1.
Federal officials have told Iowa regulators they’ll take public comments on the stopgap insurance proposal until Oct. 19, then give an answer sometime after that. When asked for an update this week, a spokeswoman for the Centers for Medicare and Medicaid Services would only reiterate that her agency is considering the proposal.
Insurance agents expect a flurry of questions from consumers.
“If the stopgap gets approved after Oct. 19, it’s going to be a whirlwind,” said Todd Thams, a Denison insurance broker who is president of the Iowa Association of Health Underwriters.
Thams said he’s never seen such a situation in his 13 years in the insurance business. He said that as time drags on with no answer from the federal government, he’s growing increasingly pessimistic about the stopgap plan’s chances.
Thams noted an option for some of the affected consumers: They could qualify for small-group insurance plans if they own a business, even if it employs just themselves. The upside to that option could be premiums on such a plan would be lower than for an individual insurance plan, he said. The downside would be that small-group policies don’t qualify for subsidies under the Affordable Care Act.
Medica Vice President Geoff Bartsh said his company is preparing to offer individual coverage in Iowa whether or not the stopgap is approved at the last minute.
“We’re in the same situation as Iowa consumers — we’re wanting to understand the path forward,” he said.
For Medica, the bigger task would come if Iowa’s stopgap plan is rejected, leaving the relatively small, Minnesota-based carrier to cover every Iowan who needs to buy individual insurance. The company has made preparations, and will be sending letters to consumers as soon as federal officials give the green light, Bartsh said. “We don’t want to actually pull that trigger until we know what’s going on.”
About 52,000 of the Iowans in question bought their 2017 policies on the federal government’s online marketplace, healthcare.gov. Just 12,000 of them bought Medica policies for this year. Most of the others bought policies from Aetna or Wellmark Blue Cross & Blue Shield. Aetna is pulling out of the Iowa individual market either way. Wellmark has said it would re-enter the market with lower rates if the stopgap plan is approved.
For now, consumers can go on Medica’s websiteto find estimated 2018 premiums, depending on their age, where in Iowa they live and whether they smoke. Those premium estimates assume the stopgap proposal will not be approved. The website doesn’t estimate how much Obamacare subsidies could help pay the premiums.
If the stopgap plan is rejected, tens of thousands of current Aetna and Wellmark customers would essentially be auto-enrolled into Medica policies, but they would have to pay their first January premium to get the insurance started, Bartsh said. Federal administrators and Medica would send these people letters in the coming weeks explaining this, and telling them how to check their coverage options, he said.
Medica released hypothetical situations in August to show what Iowans might have to pay. For example, a 25-year-old Des Moines resident could have faced a $225 monthly premium last year and a $515 premium this year. But because the customer would qualify for substantial subsidies, which would keep their share of the premium level at $203.
However, a single person making more than about $48,000 per year would not qualify for subsidies and would have to pay the entire premium. Iowa Insurance Commissioner Doug Ommen has predicted more than 20,000 such Iowans would drop their health insurance if his stopgap plan is not approved.
Ommen’s spokesman, Chance McElhaney, said Wednesday that premiums under the stopgap plan could be 70 to 85 percent lower than those submitted under the standard Affordable Care Act rules.
If the stopgap plan is approved at the last minute, Iowa consumers will be directed to a new state website, stopgap.iowa.gov, to check eligibility for subsidies. That website would replace Obamacare’s online marketplace, healthcare.gov. The state website now includes rough estimates of how much Iowans would pay under the stopgap plan, although the rates would vary on which carrier they chose.
Iowa officials, including Gov. Kim Reynolds, continue to lobby the Trump administration to approve the plan, and they say the state could implement it quickly.
Even if federal officials give last-minute approval to the stopgap plan, it could face legal challenges, however. Critics say the proposal would violate the Affordable Care Act, because it would take away federal money that helps many moderate-income Iowans cover thousands of dollars in deductibles and co-pays. The proposal would use that federal money to subsidize premiums for better-off consumers. The plan also would help insurers shoulder the risk of customers who use more than $100,000 per year in health care. Ommen says those measures would encourage more young, healthy Iowans to buy individual insurance, lowering premiums and stabilizing the market.
Gardner and Shuster, the Cedar Rapids couple facing all this uncertainty, moved back to Iowa two years ago, after living in Massachusetts and Wisconsin. They thought the Cedar Rapids area would be a good place to ease into retirement. One of the area’s bright spots seemed to be the quality of its health-care system, including insurance options.
With health insurers fleeing the market and public officials unable to nail down a plan, Gardner said, “I’m not sure we made the right decision now.”
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